(Bloomberg) -- Jefferies Financial Group Inc. has moved out of billionaire Li Ka-shing’s skyscraper in Hong Kong’s Central district, the latest setback to the building that has seen vacancies jump during an office market slump.

The US investment bank was one of the key finance tenants in Cheung Kong Center, CK Asset Holdings Ltd.’s trophy property. Jefferies has relocated to Two International Finance Centre — a taller tower about a 15-minute walk away, according to the firm’s website.

The move is another blow to Cheung Kong Center, which has faced an exodus of tenants in recent years, coinciding with a rise in office vacancy rates and falling rents citywide during the pandemic. The building’s empty space accounted for 21% in September, compared with just 5.4% in mid-2020, according to Midland IC&I Ltd. 

Representatives for Jefferies declined to comment. CK Asset didn’t immediately respond to a request for comment.

Hong Kong Chief Executive John Lee is trying to revive the city’s standing as an international finance hub, after lingering Covid restrictions prompted people to leave in droves and sealed the border with mainland China. 

Meanwhile, New York-based Jefferies has been expanding in Asia in recent years, including in Hong Kong. 

Rents in Central dropped 26% in September from their peak in 2019, according to Colliers International Group Inc. Empty Grade-A office space in the city has almost tripled in three years to an all-time high of a combined 11.9 million square feet (1.1 million square meters) as of October, CBRE Group Inc. data show.

The record-high vacancy rate in Central together with abundant supply in the next couple of years will put further pressure on rents, Wendy Lau, executive director at Knight Frank LLP, said in a statement this week. 

“In the short term, some relatively aggressive landlords will deploy substantial price reductions to attract tenants, and a round of price reduction war can possibly happen,” Lau said.

--With assistance from Linda Lew, Fion Li and Pei Li.

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