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481 Shops in Hong Kong Four Core Area Are Vacant.

Image Caption
2019-09-18-(Wed)
【28Hse.com】  
Violent accidents seriously impacted retail market; Vacant shops appeared the most in Causeway Bay.

Hong Kong Wen Wei Po (by Li Zitian)

It has been over one hundred days since the violent demonstrations broke out. The retail is seriously impacted, because citizens go out less to avoid risk, and travelers also avoid to come to Hong Kong, plus with the factors of Sino-US trade war and global political and economic prospects etc., leading more and more shops to be closed. According to the shop survey announced by Midland Non-residential Properties yesterday, the number of vacant shops in four core districts (Tsim Sha Tsui, Mong Kok, Causeway Bay, and Hong Kong Central District) increased to 481 units, up 73 units per year; The overall shop vacancy rate is 6.5%, up by 0.9% per year, and the vacancy rate in Causeway Bay of 9.4% is the highest. This company believes, the number of new rental of shops would be greatly reduced as shopkeepers are more cautious on business expansion, and it is expected that the total number of vacant shops in the four districts will exceed 600 units or even hit a new high next year.

The Chief Executive Officer of Midland Non-residential Properties, Woo HonShing expresses, the company has conducted vacancy rate statistics for street shops in major core areas every year since four years ago, and even added the combined distribution of shops and tenants for the first time last year. The statistics this time involves a total of 156 streets and 7,456 street shops in the four core districts (Tsim Sha Tsui, Mong Kok, Causeway Bay and Central). Among them, there are 481 vacant shops in the four core areas, an increase of 73 from last year, and the vacancy rate is 6.5%, an increase of 0.9 percentage over the previous year.

Midland: Vacant shop number may exceed 600 units next year.

He points out that, the vacancy rate has risen this year, reflecting that retailers are generally cautious about expansion, and the main reasons include: First, Sino-US trade war has continued for a long time, coupled with consumer sentiment being affected by the fluctuations in stock market; Second, RMB depreciation lowers down mainland tourists’ consumer sentiment to Hong Kong;Third, retailers have difficulty in hiring employees, and government raising the minimum wage this year further increases retailers’ costs; Fourth, the continued recent local political events affects the leasing of vacant shops, which this effect has not been fully reflected in above data.

This company predicts, the number of new rental of shops would be greatly reduced as shopkeepers are more cautious on business expansion, and it is expected that the total number of vacant shops in the four districts will sharply increase and may exceed 600 units next year, or it may even hit a new high over the record of 664 units in 2017 .

According to the latest survey, the vacancy rates of shops in the four districts have increased across the board. Among them, Causeway Bay which is the traditional tourist area has 102 vacant shops, with the vacancy rate in 9.4%, which is the highest in the four core areas, and it rises 1.3 percentage year-on-year. Tsim Sha Tsui which is also a tourist area has 102 vacant shops, with the vacancy rate rose slightly by 0.4 percentage to 6.8%. Hong Kong Central District has 131 vacant shops, with the vacancy rate rose by 1.5 percentages to 9.1%. Mong Kok recorded 146 vacant shops, with the vacancy rate in 4.3%, the lowest of the four districts. Woo HonShing expresses, in addition to tourists' consumption, Mong Kok also hold a certain proportion of local consumption, so its vacancy rate has remained the lowest among the four districts in the near future due to the smaller impact.

Gloucester Road has the highest vacancy rate of 36.7%.

He also points out that, calculating base on the first-tier and second-tier streets, Gloucester Road in Causeway Bay has the highest vacancy rate of 36.7%, with 11 shops are vacant. In terms of the number, the main streets having the largest number of vacant shops are Jaffe Road, Causeway Bay and Granville Road, Tsim Sha Tsui, with both have 21 vacant shops.

The number of shops ready to open reduce more than 60%.

An analyst of Data Research Department of Midland Non-residential Properties, Chen HoCheung expresses, as in last year, the merchant has the highest proportion in the core area is catering industry (25.2%), followed by clothing/shoes/leather goods (11.9%). Among them, the number of "being decorated" shops, which mainly reflect the newly rented shops, is only 66 in the latest, a significant decrease of 63.1% compared with179 units last year. This shows that retailers are cautious and leasing activities are extremely weak, which is a big warning sign of worse market.

Chen HoCheung also points out that, in the four core areas, the number of catering shops increases the most, with a total of 1,880 units in the four districts, accounting for more than one quarter of the total number of street shops in the core area, also an increase of 134 units compared with last year, and the number is droved mainly by Taiwanese beverage shops and snack outlets. As for cosmetics/personal care stores, they have also developed rapidly in the near future, with a total of 223 units in core areas were recorded, and its proportion rises by 0.29 percentage year-on-year. The reason is that in the past one year, the demand for such products by mainland tourists has increased, and the relevant stores have been actively expanded. In addition, compared with no record last year, the number of doll clamp shop increases to 11 this year, with 8 among are located in Mong Kok District.
Translated by 28Hse.com . All right reserved.