British clothing store 300,000 short-term rental in the middle of the complex
Although the Christmas retail season is approaching, there are still many shops in the core retail district in Central. The owners have to change their rental strategies and turn the shops into short-term rentals. The unilateral penthouse at the junction of D’Aguilar Street and Wellington Street in Central has recently been leased to the British clothing brand Jack Wills in short-term form. The monthly rent is only about $300,000, which is 25% lower than the rent.
It is understood that Jack Wills has just leased the first floor of No. 18 and the first floor of Yefeng Building, No. 2 to No. 18, Dejili Street, Central, with a monthly construction area of about 592 square meters. The first floor has a construction area of about 1,500 square feet. A total of about 2,092 square meters, 呎 143 yuan. The shop is adjacent to Lan Kwai Fong, and has two sides on both sides of D’Aguilar Street and Wellington Street. It operates in the form of Pop Up Store and specializes in the Christmas and New Year retail season. The lease is tentatively scheduled for about 3 months until next year. After the Lunar New Year.
According to the data, the former tenant of the shop was the sports shoe brand New Balance, which was leased at the end of 2014. At that time, the monthly rent was about 580,000 yuan and the rent was about 277 yuan. However, New Balance only fulfilled a lease and did not exercise the right to renew the lease. It was moved out after the end of last year.
High vacancy rate in the region
As the rent has been drastically lower than that of the year, the landlord’s rent is not considered aggressive. The intentional monthly rent is about 400,000 yuan, which is 180,000 yuan or 31% lower than New Balance’s old rent, and can provide some bargaining space. Although the retail market has rebounded from the bottom of the market, there are always more “Jipu" in Central which have not been digested by the market. Therefore, the rent of the shop has not been successfully leased for one year. In view of the approaching retail season, owners have abandoned the strategy of renting only long-term tenants, accepting short-term tenancy and being rented, but they are 100,000 or 25% lower than originally rented.
Jack Wills entered the Hong Kong market in 2011 and currently has five branches in Hong Kong, most of which are located in shopping malls. As the brand has only one branch in Causeway Bay on Hong Kong Island, it is short-term rental in Central to test the retail market response.
According to DTZ’s data, the rent of Central Lands is the weakest among the four major retail districts. In the fourth quarter, rents still fell by 1.6% quarter-to-quarter and fell 6.3% for the whole year. The rents in Causeway Bay, Tsim Sha Tsui and Mong Kok 3 have stopped falling and rose by 1.5% to 5.6%. Central rents could not reverse the decline, mainly because the desire to expand the big brands was not strong, and the vacancy rate in the region reached 7.1%.
Lin Yingwei, executive director of DTZ and the head of Hong Kong’s retail department, expects that the consumer market will be uncertain next year. I believe that the rent increase in the ground floor is limited. It is expected that the rent in the core area will increase by 1% to 3% in the first half of next year. Only the Central Reserve will still fall 3% to 5 %, the rental trend is expected to improve after the reduction of vacant shops.