An influx of independent mainland travellers and improved domestic consumption are speeding up the resurgence of the retail sector, with shopping centre occupancy improving and rentals rebounding, according to landlords.
Hysan Development, the largest commercial landlord in Causeway Bay, has seen retail portfolio occupancy rise to 98 per cent from 96 per cent a year earlier while overall rentals have returned to levels seen before the outbreak of Sars.
Lora Luke, Hysan Development retail leasing general manager, said retail rentals had plunged 10 per cent to 20 per cent during March and April, at the height of Sars.
'The rentals achieved in the latest renewed contracts had returned to the level before Sars,' Ms Luke said.
She said the company would not consider further rental increases until the overall economy had stabilised.
But Hysan has pinned its hopes on China's more affluent residents and two years ago it began advertising its shopping centres in mainland cities to attract outbound business travellers.
Ms Luke said about 20 per cent of tenant turnover was from mainland contributions, compared with about 10 per cent a year ago.