Date
22 October 2017
Savills' Simon Smith and Raymond Lee say there is a shift in spending patterns and the Occupy movement has an impact on business. Photo: EJ Insight
Savills' Simon Smith and Raymond Lee say there is a shift in spending patterns and the Occupy movement has an impact on business. Photo: EJ Insight

Some shopping malls win, thanks to Occupy campaign

There are winners and losers in the Hong Kong retail market as the month-long Occupy movement has diverted consumers from the protest-hit areas to other locations and shopping malls.

Some of the winners are Olympic Station, Taikoo Shing, Festival Walk and even Times Square in Causeway Bay, according to global real estate services provider Savills.

They have seen an increase in the number of visitors because it is not so convenient for some people to go to their usual shopping areas, said Simon Smith, senior director and head of research and consultancy services in Savills.

“What’s actually happening in the retail market is we see spending patterns shifting. They just move away from areas you can’t get to,” Smith said.

But he said that rents and prices of the street shops in the protest-hit areas will feel more downward pressure — probably about 5 percent — over the next three months with protesters continuing the street blockade.

Meanwhile, tourists continue to come to Hong Kong. The total number of tourists and the number of mainland visitors increased 11.4 percent and 15.6 percent respectively year on year from September 29 to October 16.

For the office market, little impact from the protests has been seen so far although some tenants, such as those in Citic Tower in Admiralty, may have experienced some disruption to their business.

The Occupy campaign could marginally reduce the appeal of some office buildings in Admiralty but this has yet to be reflected in any rental declines, Smith said.

“While the current political situation may concern investors, many of them do look beyond the near term and invest in a place with robust property fundamentals. Hong Kong is one of the best examples,” he said.

However, overseas investors may demand an increased risk premium for Hong Kong if the disruption worsens, which will result in higher capitalization rates and lower prices, he said.

Raymond Lee, Savills’ Greater China chief executive, said that political instability will have an impact on business in Hong Kong.

“In the coming six months to a year, there will be more offices available in Admiralty. More people will want to sell them,” he said.

“The Occupy movement may happen again in the future. Users there may be worried… For a foreign expert, if it is so difficult for him to get to work, he may choose to go to Singapore or elsewhere.” 

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JH/JP/JL

EJ Insight reporter

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