New | Hong Kong shop landlords face further rental pressure as China cuts import tariffs
Beijing's decision to cut import tariffs on some goods will give tenants more bargaining power
For shop landlords in Hong Kong this year, bad news is never far away.
Topping their worries in 2015 has been the decline in the number of tourists from China, which has taken its toll on shop rentals in the city, pushing up vacancies in prime shopping districts. Now, landlords face heightened concerns after the central government's decision to cut import tariffs on a range of consumer goods.
"The move will have an impact on Hong Kong's retail sector and shop landlords," said Helen Mak, a senior director at Colliers International.
Although the reduced tariffs would not immediately drag down shop rentals, tenants would have more bargaining power in rental negotiations during contract renewals, Mak said.
As Hong Kong's reputation as a shopping paradise diminishes, Mak said international brands could consider China as an option for the opening of flagship stores in the future.
China's Finance Ministry on Monday said that from June 1, it would lower import taxes for some items, including suits, fur garments, skincare products, baby food and diapers, by an average of more than 50 per cent. For cosmetics, the tariff will fall to 2 per cent from 5 per cent, while the tax on diapers will drop to 2 per cent from 7.5 per cent.