ExclusiveHong Kong’s biggest shopping centre Harbour City offers rent concessions and shocks tenants with lease renewal terms

Tenants at Harbour City in Tsim Sha Tsui have a July 24 deadline to accept the retail landlord’s terms or forgo rent concessions

Some have expressed discontent and shock over the tactic, given the state of the industry and a third wave of coronavirus cases hobbling the economy

3-MIN READ3-MIN

Few visitors were seen at the Harbour City shopping centre in Tsim Sha Tsui amid the coronavirus outbreak in this picture taken in April 2020. Photo: K.Y. Cheng

Published: 9:45am, 22 Jul 2020Updated: 11:56pm, 22 Jul 2020

The owner of Hong Kong’s biggest shopping centre is offering its tenants additional rent concessions, with a catch: extend the leases for at least 18 months in a market facing a third wave of coronavirus infections.

The tactic has come as a shock to retailers at Harbour City, an upmarket mall located in Tsim Sha Tsui tourist district that is vying with Causeway Bay for dwindling visitors in the city. The mall, ultimately owned by Wharf Reic, has asked its 400-odd tenants to decide by July 24 in a strongly-worded letter seen by the South China Morning Post.

Besides committing to new leases, Wharf also requires its tenants to meet other conditions to receive a 40 per cent retroactive discount to rents in May, according to the July 10 letter. Wharf had earlier halved rents for tenants from February to April.

Among other requirements, they will need to have paid up before July 15 all their outstanding rents, charges and arrears accrued as of June 30, according to the letter.

The offer “is a one-off measure” to deal with the current situation faced by the retail industry and does not mean more are in store, according to the letter signed by Veronica Chan, who is general manager of retail leasing and business development at Harbour City Estates.