Hong Kong’s economy, which has been devastated both at home and abroad, is entering a recession, and business investors and tenants are beginning to lose confidence in the outlook
In a review of the property market yesterday, DTZ said that Hong Kong’s retail industry was deeply affected by social conflicts. In October, the number of visitors fell by nearly 46% year-on-year. Rentals in core areas entered the upward trajectory from the beginning of the year, but were completely offset in the third quarter. The increase was even lower at the end of the year. Rents in Central District fell by 18.8% throughout the year. It is expected that rents in core districts will record double-digit declines in the first half of next year.
Dade Liang pointed out that since the “social conflict” in Hong Kong in the middle of the year, shops in multiple districts have been repeatedly affected and have to suspend business
In addition, as the conflict has worsened, the retail business has been severely affected. In October, the number of tourists dropped by 45.9% year-on-year It is the largest monthly decline in the calendar year. Part of the core area renting had originally resumed its upward trajectory at the beginning of the year, but the continued social conflict has made the upward trend unsuccessful. The increase has been completely offset in the third quarter and fell further in the fourth quarter. Among them, Tsim Sha Tsui and Mong Kok recorded quarterly declines of up to 10%, and Central and Causeway Bay fell quarterly by 9.8% and 8.5% respectively. In terms of declines throughout the year, the cumulative decline in Central was as high as 18.8%, while the other three core areas fell by 10.1% to 13.8%.
Causeway Bay rents are expected to fall the most
Lin Yingwei, the head of the Hong Kong retail department, said that for the time being, the social situation has not subsided quickly, and it will be as soon as possible after the Chinese New Year to determine whether the rent has bottomed out. He is not optimistic about next year’s prospects. It is expected that rents in all districts will record double-digit declines in the first half of the year. The situation in Causeway Bay will be the worst, with rents falling between 12% and 14%; catering rents may be cut by 5% to 12%. He also mentioned that he noticed that some shops opened early and opened up and cut expenditures, but there was no large wave of rent-outs. Another owner provided rent concessions for 3 to 6 months.