Third coronavirus wave pushes back recovery of Hong Kong’s struggling retail property sector to mid-2021

Name: Hong Kong battles third wave of coronavirus infections
Uploaded: 2020-07-14T23:00:17.000Z
Duration: 3 min 10 s
Description: Hong Kong battles third wave of coronavirus infections

Retailers will be more cautious with their expansion plans because of the new social distancing measures, says Colliers

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The coronavirus pandemic has hit Hong Kong’s retail sector, which has resulted in a spate of shop closures in the last several months. Photo: Felix Wong

Lam Ka-sing

Published: 7:00am, 15 Jul 2020Updated: 10:44pm, 15 Jul 2020

Hong Kong’s retail property market will only start to recover in the second half of next year as a third wave of Covid-19 infections forces businesses to rethink their expansion plans.

The government reintroduced social distancing rules on Monday following a sudden surge in coronavirus infections. Cinemas and other venues have been forced to shut again. Dining in restaurants has been curtailed at night, and if the situation worsens, only takeaways will be allowed until the transmission is brought under control, according to the health minister.

“It may be the middle of next year when we see a gradual recovery,” said Cynthia Ng, head of retail in Hong Kong at Colliers International. Because of “the new measures, retailers will definitely be more cautious. In the second half of this year, those expanding, like supermarkets, they’ll be more cautious.”

Ng added that retailers who have been discussing upcoming lease renewals may put their plans on hold, with rents of large shops in top shopping streets likely to feel the pressure. This is evident from Colliers’ Hong Kong high-street retail rent index, which fell to 2004 levels in the second quarter.

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Hong Kong battles third wave of coronavirus infections

In mid-May, JPMorgan had predicted that recovery of tourism-related consumption might start by October when border controls are lifted, but a recurring wave of coronavirus infections locally and across the world are bound to delay the anticipated recovery.

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