Knight Frank expects street shop rents in major shopping districts to fall by about 15% this year

Real estate market

Written by: Yue Yueting

2019-12-03 17:22

Hong Kong ’s retail sales in October plummeted by 24.3% year-on-year, the largest decline in history; total retail sales in the first ten months of this year were estimated to have fallen by 9%. Knight Frank, senior director and head of the retail department, said that social instability has reduced Hong Kong people ’s willingness to spend and that traffic is blocked. Many citizens will leave work early and choose to stay in the community. It is expected that this year ’s major shopping areas, such as Central and Tsim Sha Tsui Street rents in Causeway Bay, Causeway Bay and Mong Kok will fall by about 15%; whether the decline will continue next year will depend on social movements, but the decline is unpredictable.

Knight Frank, senior director and head of the retail department (pictured left) believes that retailers will adjust store opening strategies in the future. (Photo by Wu Yueting)

McHellan believes that social events have not had a significant impact on the business of shopping malls and stores in the people's livelihood area, because these shops mainly sell daily necessities, the sales are relatively stable, and the rents will not increase much, and the citizens stay in the community for consumption. It will help develop community life. She estimates that retailers may adjust their store opening strategies in the future, focusing on opening stores in major shopping areas in the past and spreading them to non-core retail areas.

Hong Kong Island companies reduce office space by up to 30%

Affected by the Sino-US trade war and social instability, companies have adopted a more prudent approach to leasing office buildings. Liu Bowen, senior director of the commercial department of Knight Frank Hong Kong, pointed out that at present companies hope to save expenses and some will move their offices to non-core areas. Many companies have reduced the existing lease size by about 20% to 30%. Individual Grade A office buildings have reported cancellations, which has increased the market supply. However, the vacancy rate of Hong Kong Island office buildings is still low. It is expected that Hong Kong Island Grade A office rents will fall by about 6% next year. To 8%.

Knight Jian, Executive Director and General Manager of Knight Frank and Director of the Commercial Department of Kowloon District, added that under the uncertain market conditions, many companies tend to find short-term office leases, which is beneficial for shared office business. He said that although the number of cases of abandonment of office buildings in Kowloon increased, this is not the mainstream. Most foreign companies are just shelving their expansion plans and have no plans to withdraw from Hong Kong. It is estimated that office rents in Kowloon will fall by 2% to 4% next year. Bigger.

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Knight Frank Shop Market