Shop rents at the top end of town could fall by as much as half as big spenders from the mainland stay away from Hong Kong, Ming Pao Daily reported Monday.
The report said that owners of some of Causeway Bay’s most valuable shop spaces are considering a switch to short-term leases and halving rent as they continue their 18-month struggle to find takers for their properties amid waning hopes of renting out their real estate as flagship stores.
Retail sales in Hong Kong unexpectedly fell 1.3 percent in March and fewer mainland tourists made the trip across the border over the May Day break. Some analysts said mainland visitors have changed the way they spend and fewer cash-laden consumers are traveling to Hong Kong.
According to the Hong Kong property Review 2014 published by the Rating and Valuation Department, the general vacancy rate of retail properties was 7.2 percent as of end-2013, up from 6.9 percent a year earlier.
About 8.41 million square feet of space was vacant, up 3.8 percent, and about 58 percent of the vacant properties were at shopping malls and upstairs stores.
Commercial real estate company Colliers International said more of the mainland visitors to the city are not high-spending and tend to buy cheaper consumer products rather than luxury goods.
It said store rents in the four major shopping districts — Central, Causeway Bay, Tsim Sha Tsui and Mong Kok — fell 0.7 percent on average in the first quarter from the previous three months and a 5 percent dip is expected over the next year.
– Contact us at [email protected]