‘Sheer delusion’ for Hong Kong landlords to refuse to cut rents: CY Leung

Former Hong Kong leader Leung Chun-ying has challenged landlords to “adjust their mentality” over rental yields as he renewed his call for price cuts to stem a 40-year-high vacancy rate for commercial properties from rising further amid a slackening economy.

Leung, now a top political adviser to the country, also warned that landlords would be harmed in the end if they refused to budge on lowering rents.

“It is sheer self-delusion if landlords think they can get the rent level they want by leaving the premises vacant and waiting [instead of cutting the rents],” Leung said on Saturday.

Leung, now a vice-chairman of the Chinese People’s Political Consultative Conference and state leader, weighed in on the debate over Hong Kong’s commercial rents last week after a government report showed that, by the end of 2024, the total vacant floor area of private commercial buildings had reached 1.4 million square metres.

The empty space represented a vacancy rate of 11.8 per cent – a record high for the past 40 years.

The economic slowdown has also resulted in a string of high-profile shutdowns of established restaurants in recent months, with some citing high rents as a reason.

“The overall economic environment is like that now. Perhaps it is partly because people are going north to spend or people are getting used to buying takeaway or shopping online,” Leung said.