Hong Kong Protests May Hit Retail Rents as Shoppers Avoid City
Hong Kong Protests May Hit Retail Rents as Shoppers Avoid City
(Bloomberg) -- As Hong Kong protests against the government’s controversial extradition bill roll on, add retail landlords to the growing list of businesses affected.
Street-level retailers’ rent expenses could drop as much as 3% in the year to March 2020 as reduced foot traffic in prime retail locations such as Central and Causeway Bay erodes landlords’ ability to reverse rent cuts, according to Bloomberg Intelligence.
Jones Lang LaSalle Inc. estimates high-street retail rents may fall by about 5% this year due to the unrest and escalating trade war between China and the U.S.
What Bloomberg Intelligence Says:
“There have been frequent protests in Hong Kong in the past month or so and it has influenced how tourists view Hong Kong as a travel destination. This will affect mainland tourists’ spending in Hong Kong.”
-Patrick Wong, real estate analyst. For full report, click here
While the protests have predominantly taken place on the city’s streets, some have spread to shopping malls.
Hundreds of demonstrators sat inside Sun Hung Kai Properties Ltd.’s New Town Plaza on Saturday to protest the developer’s handling of clashes in the mall last week. Shops had to close early, the Oriental Daily reported. Demonstrators have accused the developer of allowing police to enter the property where a group of protesters gathered, which led to violent clashes July 14.
The Hong Kong Retail Management Association last week said that “most members” had reported a single-to-double-digit fall in average sales revenue between June and the first week of July, when major demonstrations occurred in the city’s main business districts.
To contact the reporter on this story: Shawna Kwan in Hong Kong at wkwan35@bloomberg.net
To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Peter Vercoe
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