Foreign Property News | Posted by Si Thu Aung
Retail News Asia revealed that during the first quarter of the year, retailers have experienced a substantial decline in sales of around 50 to 80 percent, prompting tenants to request for rent relief from their landlords.
Data published by global property firm Savills indicated that several shopping centre landlords have already provided 30 to 60 percent temporary financial assistance for tenants affected by the various crisis throughout the year, including the political protests and now the public health crisis.
Nevertheless, there are still some mall landlords who are hesitant to offer rental assistance even though the number of tenant vacancies are rising.
The retail rents in Hong Kong dropped 14 percent quarter on quarter, averaging by about 43 percent year on year.
“A hardening local situation combined with lack of visibility is giving rise to a wide range of reactions to the current crisis from landlords and tenants,” said Simon Smith, research and consultancy senior director at Savills.
For those who did adjust their rental rates, he had this to say: “The lower rental costs will attract newcomers to the Hong Kong market, which, for too long, has changed the world’s highest occupational costs.”
“As far as we can see, vacancies are expected to rise over the next six to 12 months, which will put more pressure on rents over the rest of the year,” concluded Nick Bradstreet, managing director at Savills.
Ref: Propertyreport
