Outlook for Hong Kong retail rents bleak as trade war and protests dampen sales
- High street rents in Central fell the most in the second quarter at 3.8 per cent
- JLL predicts a 5 to 10 per cent drop in rents for high street shops and up to 5 per cent growth for rents in shopping centres for the rest of the year
Hong Kong’s retail leasing market is expected to slow further in the second half as sales continue to slump because of the US-China trade war and uncertainty over protests against the extradition bill, industry observers say.
Overall rent for shops along prime shopping streets fell 1.2 per cent quarter on quarter from April to June, with Central recording the sharpest drop at 3.8 per cent, real estate research and consultancy firm Savills said.
“In the first half of the year, business has been slow for retailers,” said JLL’s regional director of retail leasing services Jeanette Chan. “And now with the rally and protests against the extradition bill, business is even worse.”
Landlords are already renting out shops at massive discounts. According to Savills, high-end US restaurant Lawry’s The Prime Rib got an 80 per cent discount on a 6,500 sq ft space in Central compared to the previous tenant. Other tenants too have managed to wrangle hefty discounts from landlords.
