Sun Hung Kai malls to give away nearly US$1 million in cash vouchers to woo back coronavirus-wary shoppers
- Sun Hung Kai will hand out HK$10,000 worth of cash vouchers to the biggest shoppers at its malls
- Mall operators rewriting the playbook to get coronavirus-worried shoppers back into stores
How desperate are Hong Kong mall operators to lure coronavirus-wary shoppers back? One is offering close to US$1 million worth of cash vouchers to shoppers in July to get their shop-’til-you-drop juices flowing again.
The effort comes as malls scramble to keep stores from putting out the dreaded “going out of business” sign. The coronavirus pandemic has made Hongkongers wary of unnecessary outings and destroyed tourism. One in five shops in Central is boarded up.
Recent moves by the city’s government to give each resident HK$10,000 and ease social distancing restrictions have prompted landlords to rewrite their playbooks.
Sun Hung Kai plans to give out cash vouchers totalling HK$7 million (US$903,208) in July at its shopping centres, which include APM in Kwun Tong, Harbour North in North Point and New Town Plaza in Sha Tin.
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Hong Kong’s biggest developer by value has a plan that will cover July’s four weekends plus the one public holiday. On each of those days, the shopper who buys the most at each of its 24 shopping centres will be rewarded with a cash voucher worth HK$10,000.
In addition, it will hold 23 festival promotions in 12 of its major malls, and it will give out extra vouchers of HK$30 to HK$80 to those who spend at least HK$500 on any day from June 29 to July 26. All that adds up to HK$7 million (US$903,208).
“The expected growth [in June footfall] can reach 10 to 15 per cent,” a spokeswoman of the landlord’s shopping centres said about Sun Hung Kai’s effort.
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The increased traffic, amid the incentives and the government’s HK$10,000 bonus, will help drive sales at its major malls by 10 per cent this month, the spokesperson said.
The latest effort by Sun Hung Kai is part of a HK$60 million spending reward budget this year that started in February. Its previous gift lottery from May 22 to June 21 attracted close to 200,000 shoppers who spent HK$1,200 to HK$1,500 each.
Fortune Reit also offered gifts like iPads and HK$1,000 supermarket vouchers for big shoppers at its 16 shopping centres.
Meanwhile, MTR will open 15 per cent of shops at The Lohas, Lohas Park’s shopping centre, in August before opening fully by the end of this year. It already secured 70 per cent occupancy.
“At the peak of pandemic, from February to April, business was hit,” said David Tang, property director at MTR Corp. “But from May, gradually social distancing rules … were relaxed and many patrons have already returned.”
But for street shops, the outlook remains dim, as the city is mired in recession. Such shops, generally owned by individual investors, do not have deep enough pockets to launch comparable marketing offensives.
Central’s vacancy rate of shops reached 20.5 per cent in May, while Causeway Bay’s vacancy rate has surged to 11.1 per cent, according to Centaline Commercial. Wan Chai, Tsim Sha Tsui, Mong Kok, Tsuen Wan and Yuen Long all have double-digit vacancy rates.
The vacancies come as the prices of buying and leasing shops are sliding.
“The slide in shop prices has become a megatrend. Tier-one streets cannot make an exception. Some transactions, like a 1,000 sq ft one in Central’s Elgin Street, had [sales] prices down 50 per cent from the asking price,” said Raiky Wong, director of shops at Centaline. “Undoubtedly amid the poor economy, numerous international big brands closed many shops, raising the vacancy rate.”
Centaline expected a 20 per cent drop in the sales price of shops in the third quarter on quarter and only about 1,500 transactions of commercial and industrial properties were completed in the first half this year. That was the lowest half year ever.
Sales transactions of shops can be expected to continue to incur losses for owners in the second half of this year, said Edwin Lee, founder and chief executive at Bridgeway Prime Shop Fund.
