HONG KONG (Oct 30): Prime street shops rents are expected to drop further across all major retail districts in Hong Kong, including Hong Kong Central, Causeway Bay, Tsim Sha Tsui and Mong Kok,according to the latest Hong Kong Monthly Property Market report by Knight Frank. This comes after a 10% decline during the first three quarters of the year,
“Prime street shop landlords were under pressure in rental negotiations. Those in Causeway Bay have a number of tenants in Russell Street who received over 30% rental concessions on lease renewal.
“Cosmetics retailer Colourmix also preleased the shop at 18 Russell Street for about 40% lower than its existing rent, at HK$1 mil. Sportswear retailer adidas replaced Coach at 36 Queen’s Road for rent about 22% cheaper,” said Knight Frank.
However, there are signs the retail rental market is stabilising, as spaces with discounts offered are taken up quickly.
Meanwhile, total retail sales value dropped by 5.4% year-on-year (y-o-y) to HK$37.9 billion in August. Its prime generators — outlets selling jewellery, watches, clocks and valuable gifts — generated HK$7.8 billion in sales.
“Total visitor arrivals in August decreased 6.6% y-o-y, more than the decline of 2.9% in July,” the report stated, citing slower inbound tourism as a probable cause.
A few major retail property sales deals were recorded in Sheung Wan with the sales of several units on the ground floor of the Lyndhurst Building and the lower ground floor of 21 Elgin Street for HK$74 million and $61.5 million respectively.
The month also saw some major leasing transactions being carried out. Several units on the ground floor of the Island Beverley building and those of the Hankow Centre Arcade, both in Tsim Sha Tsui, with monthly rents of HK$1.643 million and HK$550,000 respectively.