Hong Kong retail stand-off turns nasty with landlords suing tenants to recover arrears as recession deepens

Wharf Reic, owner of Harbour City, sent court bailiffs last week to seal off some shops and also sued a cinema operator to recover rent arrears

More than 560 companies have faced liquidation threats since early 2019, while HK$134 billion of retail sales evaporated

Reading Time:4 minutes

Some retailers at Harbour City, Hong Kong’s biggest shopping centre in Tsim Sha Tsui, put up notices slamming their landlord for shutting their shops over rental dispute. Photo: Sam Tsang

Published: 7:33pm, 21 Aug 2020Updated: 10:40pm, 21 Aug 2020

The months-long stand-off between Hong Kong’s commercial landlords and retailers is taking a turn for the worse, as a third wave of coronavirus outbreak amid the city’s worst recession crimped retail sales, pushing many businesses to the brink of bankruptcy.

Harbour City, one of Hong Kong’s best-known luxury shopping centres and a favourite for mainland China’s shopping tourists, last week sealed off the stores of clothing retailers G2000 and Anagram in a dispute between the owners and the landlord Wharf Real Estate Investment Corp.

Wharf Reic also separately sued UA Cinemas last week for HK$1.92 million in unpaid rent at its Times Square building in Causeway Bay, while Hang Lung Properties has sued UA six times since May for HK$7.17 million owed at Amoy Plaza.

“Landlords and tenants are symbiotic” in business, said Annie Tse, chairwoman of Hong Kong Retail Management Association, adding that she is “disappointed” by the rising spate of legal disputes. “This reflects [the fact] that landlords lack social responsibility and [the empathy] to share in the burden” of Hong Kong’s retail slump, she said.

Disputes between landlords and tenants have been simmering through the past four quarters as the city’s economy slumped into its worst recession on record. More than 560 companies in Hong Kong have faced liquidation threats since the start of 2019, while HK$134 billion (US$17.3 billion) worth of retail sales evaporated in that span, according to the government statistics.