Emperor opens first cinema in Central, to pay HK$1.2 million per month to rent former HMV space
Site covers more than 16,000 square feet and will also include fine dining restaurants
Emperor Group, the entertainment conglomerate founded by media magnate Albert Yeung Sau-shing, will open its first cinema in Hong Kong by leasing a two-storey space in downtown Central, renting the space for an estimated HK$1.2 million a month, according to agents.
The new cinema on the third and fourth floors of Entertainment Building, formerly rented by HMV Retail’s flagship DVD store in the city, occupies more than 16,000 square feet, two people with knowledge of the lease agreement told the South China Morning Post.
Emperor plans to operate a cinema through its Emperor Motion Pictures subsidiary, as well as fine dining restaurants at the venue, agents said.
“A cinema generally cannot support such high rents through selling tickets,” said Michael Chik, managing director of agency Sheraton Valuers. Emperor plans to make its venue available to rent to investment banks, or insurers to hold premiere parties.
A spokesman at Emperor Motion Pictures declined to comment.
The Entertainment Building is owned by a venture with Angela Leong, the fourth wife of casino tycoon Stanley Ho, as a major shareholder.
HMV closed its flagship store at Entertainment Building on Queen’s Road Central with little fanfare in April, moving to a smaller shop a few blocks away at Manning House, also in Central. The relocation helped the DVD retailer slash its rent by 25 per cent to less than HK$1 million per month.
Hong Kong’s retail spending and consumer demand remains in the doldrums, as a strong Hong Kong dollar discouraged mainland Chinese tourists and changed consumption patterns. That squeezed consumer sales, forcing landlords to cut rents to hang on to retail shops, said property consultant Colliers International.
Hong Kong’s retail sales declined 7.7 per cent in July, even as Chinese tourist arrivals rebounded for the first time in 13 months.
July’s figures marked the 17th consecutive monthly contraction, but the drop was smaller than in June, which saw a fall of 8.9 per cent compared with the same period last year
Colliers Research predicts rents and capital values of prime street shops will decline further in 2016, down 10 per cent and 24 per cent, respectively.
Faced with tough challenges amid a visible decline in tourist arrivals and retail sales, the retail industry is set to face a “new normal,” agents said.
Some landlords are offering the concept of so-called experience retailing. A cinema is one such option.
“With more retailers and landlords struggling to increase market share and expand their reach, strategic business thinking and innovative retailing practises could determine which ones are in, and which ones are out,” said Jones Lang LaSalle’s national director of research Cathie Chung. The new normal is unlike previous years when the sustained spending of mainland Chinese visitors fuelled growth in real estate rents, she said.
Drone maker DJI will open a 10,000 sq ft flagship store in Causeway Bay to feature examples of aerial photography and conveniently showcase their products. Focused on customer engagement, the store will enable shoppers to see, touch and learn more about the products through experiential seminars, workshop and drone-related special events within the flagship store, said Chung.