Exco convenor appeals for retail rent cuts to help businesses keep heads above water

Top Hong Kong government adviser Regina Ip Lau Suk-yee on Saturday appealed to shopping centre owners to cut rents to help businesses survive.

Ip, the convenor of the government’s key decision-making Executive Council, made the call after she and colleagues from the New People’s Party found more than 100 empty shops and stalls in two shopping centres and a market in Southern district.

The 104 vacant stores included 40 at the Chi Fu Landmark, 35 in Marina Square’s east and west centres as well as 29 in Aberdeen Market.

The bleak scenes at the three sites were in stark contrast to the newly opened shopping centre The Southside in Wong Chuk Hang, which Ip said was crowded, with queues outside some restaurants.

Ip said the new shopping centre boasted a variety of stores, which would attract not only local people, but shoppers from further afield.

“Hong Kong’s economy is in a period of transformation, and the market is inevitably quiet,” she said on her social media page. “The shopping malls in Southern district are undergoing a ‘major reshuffle’ to eliminate the weak and retain the strong.

“I hope that shopping mall owners will take the initiative to reduce rents and lend a helping hand to tide over the difficult times with the merchants.”

But Ip added that shopping centres and merchants also had to muster the courage to introduce changes, give more discounts and organise special activities to increase their pulling power and encourage Hongkongers to stay in the city to spend.

She said weak business on the second and third floors of the renovated Aberdeen Market was obvious, with almost an entire row of closed stalls in the dry goods area on the third floor.

Ip added other stallholders said they had experienced difficulties as well.

She said that the overall consumption power at the Chi Fu Landmark was only average, with sparse foot traffic, but rents were high.

Ip added many empty shops were also spotted at the shopping centre in Pok Fu Lam.

Retail operators were also under pressure from high rents in the east and west centres at Marina Square near South Horizons in Ap Lei Chau, she said.

Ip quoted party colleague Nicole Wong Yu-ching, a Southern district councillor, who said that many people were pessimistic about the future of the shopping complex, as stores that had operated for years had closed down and even banks had relocated.

Businesses and shopping centres have been hit by an exodus of people heading across the border to mainland China for shopping, dining and holidays since the border reopened after the pandemic.

Retail sales in June declined 9.7 per cent compared with a year ago, the fourth monthly contraction in a row.

Officials and industry insiders have already urged operators in the sector toto adapt and revamp themselves to entice people to remain in the city to spend their cash.

Figures from property consultancy JLL Hong Kong showed retail vacancy rates across Central, Causeway Bay, Tsim Sha Tsui and Mong Kok stood at 11.1 per cent in the first quarter of 2024.

That was down from a peak of 18.5 per cent in the third quarter of 2022, but still more than double the 5.2 per cent logged in the second quarter of 2019.