Curbs on Shenzhen visitors to Hong Kong and a general decline in mainland shoppers’ appetite for luxury products have continued to put pressure on retail properties in popular tourist spots.
In a recent transaction, a street level shop measuring 1,446 square feet at Empire Court in Causeway Bay was leased out at HK$400,000 (US$51282) a month, or about HK$276 psf, according to the Hong Kong Economic Journal.
The shop was previously occupied by a fashion retailer, but it did not renew the contract after it expired last August.
The shop had been vacant for a year before the new lease was signed. Reflecting a weaker market situation, the latest rental is about 30 percent lower than the previous lease.
Citing Hong Kong Property, the report said the number of retail property leasing deals between April and August has declined from a year earlier across several districts including Central, Causeway Bay, Tsim Sha Tsui and Mong Kok.
More landlords are expected to slash rents.
But elsewhere in the office building segment, things are looking more upbeat. Multinational firms and mainland companies looking to expand into Hong Kong as well as fund investors have been some of the main buyers.
For instance, Asian real estate investor Pamfleet paid HK$350 million last month for the whole block of Bing Fu Commercial Building in Mong Kok as a long-term investment, market sources said. The fund specializes in identifying underperforming properties, renovates and repositions them to increase value.
Centaline Property told HKEJ that in the first seven months, the number of commercial building transactions hit 4,046, or nearly HK$74.9 billion in value, or about 80 percent of last year’s total transaction amount.
Major deals worth HK$100 million or more increased notably, implying a positive outlook for the whole year.
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