Rent Will Fall In The Four Core Retail Areas Of Hongkong

Jewellery, watches and clocks and precious gifts continued to plummet and retail rents in Hongkong fell. According to the first Savills report of Taiping Davies, the real estate service provider, in the two quarter of 2014, the rental of Tongluowan shops decreased by 3.5% in the quarter, the rent in the central market dropped by 5.1%, and the rent in Mong Kok dropped by 3.8% on a quarterly basis, mainly due to the increase in vacancy rate and the increase in the number of shops that had leased out in advance in the same period of 2014.

With the reduction of the 20% mainland tourists' free travel plan in Hongkong discussions, the total retail sales volume of Hongkong has been declining for 6 consecutive months, while the luxury goods industry, especially jewelry, clocks and precious gifts categories, has been hit most. In the past 4 months, the total sales volume of Hongkong has decreased by 22.2%, 28.2%, 24.4% and 39.9% respectively.

According to Lin Yingwei, director of Hongkong Commercial Department of DTZ, interviewed in recent months, most of the tenancies signed in recent months have been maintained at the original rent level, and some have even dropped to the 2011 price level. The rent changes in these golden lot shops can indicate the rent trend in other areas in the short term. Lin Yingwei said jewellery clock watch industry is a pillar industry to support the rent increase in gold lots, followed by the clothing industry.

If the sales volume of these two fields can no longer afford the current rent level, it will be very difficult for owners to find other businesses to rent shops on the same rent. In this way, the rent will inevitably be greatly reduced, even if the number of tourists continues to grow, it will not be able to reverse the situation.

As early as July, the main real estate service providers in the Hongkong market expressed pessimism about Hongkong retail rentals. The commercial real estate service agency CBRE Group Inc. (NYSE:CBG) World Bank Richard C. R. July 17th released the two quarter of 2014 "Hong Kong Prime Retail". The MarketView report shows that the rent of Hongkong's Gold retail berths has declined for the first time since the end of 2008, or 0.3%, and the decrease was mainly due to the most gold retail rent in Tongluowan, which was 0.6% lower than that in the two quarter. The rent of the first tier shops in Tongluowan fell 1.6%, while the second tier rental remained stable.

Although retail rent There was still a year-on-year increase, but in the two quarter of 2014, it rose to a new low of 2.4% in the three quarter of 1999. In other parts of Hongkong, bunk rents are relatively stable, but some tenants will also reduce their rents due to their strong willingness to lower their rent.

CBRE Hong Kong Joe Lin Lian Zhihao, executive director of retail services, said in the report that the rent of the first tier shops could be stabilized due to the payment ability of jewelry retailers in the future market in Hongkong. However, the rent of second-line shops will be as high as 15%. The British real estate service provider Savills PLC (SVS.L) first is too Bing Davis and Knight Frank LLP. They all hold the same attitude and expect the rent will decrease by 5%-10% in the future, while the previous expectation is a 5% increase.

Colliers International Gao Li International Hongkong Real Estate Consultant Department Research Manager Joanne Lee even said that the four major core retail areas in Hongkong will be rentals, and the recent decline in Tongluowan will increase the vacancy rate of shops.