Hong Kong’s property developers commit to rental adjustments for business relief

Hong Kong’s leading mall owners are looking at various options to help retail tenants amidst the protests by proposing rental adjustments, South China Morning Post reports on 11 October 2019.

To keep retailers and market observers in the business, the adjustments will include increasing promotional activities to postpone and/or cut rental payments.

After the city recorded its worst monthly sales in August, only two property developers have committed rent cuts: Swire Properties on the last month and Hysan Development on the last week.

“Temporary rental adjustments have been offered as one possible solution,” said Hysan Development, Causeway Bay’s biggest landlord.

According to the Census and Statistics Department, retail sales fell 23 per cent year-on-year to HKD29.4 billion in August 2019 as tourists stayed away from the city.

Separately, S&P Global Ratings said in a report this week that it expected retail rents to dip slightly next year, but rents could worsen further if market sentiments do not stabilise.

“Any rent adjustments related to the recent protests will only affect the relatively small portion of leasing coming due in the near term,” the credit rating agency said. ― Construction+ Online