Retail tenants in Hong Kong are calling for significant rent reductions while landlords report a recovering market with only modest concessions.
Many tenants continue to face stagnant sales and are requesting cuts of 20 to 50 per cent to stay afloat. They point to the broader economic climate and price competition as key pressures.
Michael Leung, chairman of the Association for Hong Kong Catering Services Management, described the operating environment as poor. He noted few people on the streets by 8pm and said over 500,000 residents leave the city for the mainland during long holidays.
Leung’s five restaurants incur monthly costs of HK$1.6 million for rent and related fees. He closed the Lucky Dragon Palace Restaurant in October after 45 years.
Edward Chan, founder of appliance maker German Pool, said online sales have hurt physical stores. He has sought rent reductions but reached no agreements so far.
Landlords typically offer cuts of 10 to 20 per cent and have raised rents in some shopping centres.