Retail rents in Hong Kong are expected to remain under pressure, as the trend of residents travelling to the mainland for leisure has led many businesses to opt for short-term leases, experts have said after the vacancy rate in the city’s busiest districts hit a 4½-year high.
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Analysts on Monday also attributed the mounting vacancies to shifting consumer preferences and the difficulty landlords faced in securing high-value tenants once luxury goods shops, such as watch and jewellery stores, had moved out.
Property agency Midland IC&I’s index earlier showed that about 900 stores were empty in four core districts – Causeway Bay, Central, Tsim Sha Tsui and Mong Kok – reflecting a vacancy rate of 12.1 per cent in the first quarter of this year, the highest level in 4½ years.
“The vacancy rate is relatively high. Additionally, the trend of northbound travel among Hongkongers has shown no signs of slowing down. In these past months, the figures for northbound travel have set new records,” Ryan Ip Man-ki, vice-president of Our Hong Kong Foundation and executive director of the Public Policy Institute, said on a radio show.
“It seems that the vacancy rate and rent of retail spaces, in particular street-level stores, will continue to be under pressure.”
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A slew of established restaurants and shops have shut down in recent months, with some citing high rents amid an economic slowdown as the main reason.