Take a walk through some of Hong Kong’s most iconic streets and you might notice a puzzling sight: prime retail spaces in Causeway Bay, Wan Chai, Tsim Sha Tsui and other areas are papered over with all types of rental advertisements where there used to be a buzz.
Out-of-reach rental prices are often a result of a simple human instinct: the desire to hold out for yesterday’s peak prices. For many property owners, accepting a lower rent can feel like a step back, potentially affecting bank valuations or reputations that have been built over the years. However, accepting a slightly lower rent today may not be a step back, but a smart leap forward.
In the business world, the time value of money is important. Simply put, money in the bank today is a powerful tool that can be reinvested or used to earn interest, whereas a vacant property is an engine switched off. Many long-term property owners in Hong Kong may not prioritise monthly income, as they have made their money many times over. However, empty spaces are bad for Hong Kong.
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Empty storefronts bring no engagement into the community, fail to create jobs or inspire commerce, and are simply bad for Hong Kong’s brand in the eyes of visitors. A lack of renovation doesn’t help a street’s energy or attract potential tenants.
Emptiness can be contagious; when foot traffic dwindles, nearby businesses suffer and a neighbourhood’s reputation dims. By holding out for a perfect number on a lease, one can unintentionally reduce the long-term appeal and value of the asset itself.
Hong Kong’s magic has always been its energy and speed. When spaces are active, the whole city benefits. An entrepreneur launches a new idea, a restaurant hires staff or a start-up finds a home, creating a virtuous cycle.