An increasing number of landlords are leasing out their street shops on a short-term basis to weather the trough in Hong Kong’s retail market while tapping into an expected surge in sales during the Lunar New Year season, property agent Midland IC&I Ltd. (00459.HK) said.
More jewellers, apparel brands and large retail chains are entering into short-term lease contracts with landlords, enabling them to occupy the shops for as briefly as three months while saving up to 70 percent in rent compared with normal long-term leases, Midland IC&I chief executive Wong Hon-shing told the Hong Kong Economic Journal.
The good thing about the arrangement is that retail tenants can walk out at a short notice of seven days, Wong said.
Big brands such as Tse Sui Luen Jewellery (International) Ltd. (00417.HK) and Bossini International Holdings Ltd. (00592.HK) have set up short-term stores in Causeway Bay and Tsim Sha Tsui, respectively, as they wait for a rent cut cycle in the retail property market.
Under the arrangement, TSL Jewellery pays about HK$350,000 a month for the space in a three-month contract ended February, sources told the newspaper.
Such short-term leases were rarely seen before among big brands.
International sportswear company Columbia, meanwhile, opened a 2,600 square foot experience store in Causeway Bay for online items and online club membership under a three-month lease that cost HK$500,000 a month from November to January.
Sebastian Skiff, Colliers International director for retail development and asset management, said landlords may have to take a 20 percent cut in the rent levels of shops in the tourist areas to retain tenants.
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