Market News

Retail Sector faces harshest conditions since SARS

Having fallen since 2013/14, the retail market looked like it was staging a recovery in 2018. That now appears unlikely as rents softened further in Q3.

• The retail sector has borne the brunt of the corrosive effects of the trade war and the damaging impact of the social unrest on visitor numbers. • Causeway Bay has been hit hardest, weekends and public holidays have been badly disrupted while retail categories popular among mainlanders have seen significant retrenchment. • Less affected have been areas nearer the border such as Sheung Shui and districts more dependent on local demand such as Tseung Kwan O. • Street shop rents are now down 54% from 2013 peaks while malls have generally proved more resilient. • Street shop landlords are offering ad hoc relief in the form of 15-20% rental reductions for three months or occasionally longer. • Looking ahead, without a resolution in sight, the current market conditions could prevail into next year and it is worth remembering that the negative impact of the Occupy Movement was felt for at least 12 to 18 months.

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