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    The First Rent Reduction In Harbour City, Hongkong Has Aroused Great Concern In The Industry.

    2020/2/17 12:54:00 0

    Hongkong Harbour CityHarbour City Rent ReductionNew Crown Virus Impact

    The 2020 Lunar New Year is the worst season for Hongkong's retail industry. From January 24th to February 2nd, Hongkong's jewellery, clocks and watches and precious gifts have narrowed to 30% and 40%, and the decline has expanded to 60% to 80%. In the fourth quarter of 2019, the volume of retail sales in Hongkong dropped by 24.1%, the worst quarter ever recorded.

    In February 11th, the Hongkong Real Estate Construction Association issued a statement, pointing out that Hongkong's economy is facing serious challenges, including the provision of wide rent reduction and other measures to relieve operational pressure. After the announcement, many developers responded immediately.

    According to an internal email to the tenant in Harbour City, the volume of shopping malls has been reduced, and the performance of many brands has been seriously affected by the outbreak of new crown pneumonia. In order to slow down the pressure on merchants, Harbour City has decided to reduce the rent in February by half.

    Harbour City covers an area of 2 million 80 thousand square feet, or 230 thousand square meters, and has more than 450 stores. Besides Louis Vuitton, CHANEL, Gucci, Moncler and other major luxury brands, it has about 60 hotels and 1 movie theaters. It is the most high-end shopping mall in Hongkong for sightseeing and shopping of most Chinese tourists. As the main driving force for the development of Kowloon warehouse, Harbour City's rent reduction has attracted the attention of the industry.

    K11, the new world's Tsim Sha Tsui shopping centre, also said that it would reduce rent in February according to individual tenants, and provide targeted relief measures for different tenants, including strengthening publicity and promoting business environment. In order to alleviate the operational pressure brought by the epidemic, the Hang Lung estate also provided half a half rent to the mainland market tenants in three weeks, with a reduction period from January 25, 2020 to February 14th.

    Sun Hung Kai properties, the parent company of the international financial center shopping mall, APM and new Century Square, announced yesterday that it would reduce the 30% to 50% of the basic rent in February to individual businesses or businesses.

    Over the past 20 years, the rise of mainland Chinese consumers has played an important role in the development of Hongkong's retail industry, and they have contributed 70% of their sales. According to the data released by the tourism board in January 31st, the number of visitors to Hong Kong in December dropped by 51.5% to 3 million 190 thousand, and the number of visitors from mainland China dropped by 53.2% to 2 million 398 thousand. During the whole year of 2019, the number of visitors to Hong Kong fell by 14.2% to 55 million 910 thousand. The number of visitors from mainland China dropped to 43 million 770 thousand, accounting for 78% of the total, much higher than that of 41% in 2002. In recent years, tourism accounts for 32% of the total output of Hongkong's services, up from 21% in the SARS period.

    For many luxury brands, the Hongkong market accounts for 5% to 10% of global luxury brands, and watches and jewellery even more. The sales of Louis Vuitton parent group LVMH in Hongkong account for 8% to 9% of its total turnover. The core brand of Kai Yun group, Gucci, accounts for about 10% of its total turnover in Hongkong.

    Affected by the epidemic, the historic first rent reduction in Harbour City, Hongkong, has aroused great concern in the industry.

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