Landlords in Causeway Bay and Mong Kok have long felt the pinch of slower demand for commercial space amid falling retail sales. But of late, the malaise is also creeping into Central.
Take Queen’s Road Central. A growing number of shops on this busy street in the city’s core business district have been left vacant, according to Ming Pao Daily.
Some stores have been closed for over a year, forcing landlords to cut rents.
Chinese President Xi Jinping’s campaign against corruption and lavish lifestyle as well as the tightening of quotas for mainland visitors have been hurting sales of luxury goods such as jewelry and watches.
Antiques and luxury watch seller Carlson Watch Co. once occupied one of the street-level shops in China Building. But it moved out in February as the contract expired.
Located on the way from the Central MTR station to Lan Kwai Fong, the shop enjoys excellent traffic. But with a rent of HK$2.5 million (US$322,600), it has failed to attract any tenant so far, a property agency told the newspaper.
Across the road at Pacific House, an 11,000-square-foot multiplex shop has been deserted for over a year.
The previous tenant, fashion brand Diesel, decided not to renew its contract last year, and the space has remained empty ever since.
It is reported that the owner is willing to slash the rent to HK$3.8 million from HK$4.8 million, but so far there’s no feedback from the market.
Thomas Lam Ho-man, Greater China head of research at real estate consultancy Knight Frank, said landlords in core districts such as Central normally have stronger holding power. They are not in a hurry to fill up their shops; most of them would rather leave their properties idle than lease them out at lower prices.
In the currently gloomy market, even in prime districts, only shops going for under HK$1 million monthly rental would be able to find tenants easily, Lam said.
The market for more expensive properties is stuck in low gear.
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