Vacancy rates of Hong Kong street shops stabilise as eateries bet on spending bounce, cheaper rents to move into trendy districts

Name: Tiny Hong Kong noodle shop turns into jazz club amid pandemic
Uploaded: 2021-03-17T02:00:20.000Z
Duration: 2 min 23 s
Description: Tiny Hong Kong noodle shop turns into jazz club amid pandemic

Vacancy rates of shops in core areas are likely to continue to stabilise in the short term, says Centaline Commercial executive

Plunge in visitor arrivals has hit luxury and cosmetics shops, but it has led to a widening in the variety of shops in the city’s major shopping districts

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Restaurants are betting on a bounce in spending power, as the launch of Covid-19 vaccines helps bring the pandemic under control. Photo: Sam Tsang

Lam Ka-sing

Published: 10:00am, 17 Mar 2021Updated: 10:09am, 17 Mar 2021

Hong Kong’s embattled street shop market is showing signs of stabilising, with mass market restaurants taking advantage of lower rents to replace luxury and cosmetics businesses in the city’s main shopping districts.

Vacancy rates in major districts have stabilised as more businesses, particularly restaurants, are betting on a bounce in spending power, said Raiky Wong, director of retail department at agency Centaline Commercial. The launch of Covid-19 vaccines would help to bring the pandemic under control, and will slowly lead to a recovery in economic activity, he added.

“The market generally believes that the shop sector is not far from the bottom. More businesses are likely to take advantage of this period of time, when there is still room for negotiating rents, and speed up their deals,” Wong said. “Recently, a lot of large shops have been rented in urban areas, which reflects a rebound in tenants’ confidence. The vacancy rates of shops in core areas are likely to continue to stabilise in the short term.”

The signs of improvement come after a massive decline in tourist arrivals, which plunged 94 per cent to 3.57 million in 2020. Hong Kong has restricted entry by overseas visitors and had stringent quarantine measures in place since mid-March last year.

And while this plunge in visitor arrivals has hit the businesses of luxury and cosmetics shops, which were primarily geared to this customer base, it has led to a widening in the variety of shops in the city’s major shopping districts.

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Tiny Hong Kong noodle shop turns into jazz club amid pandemic

For instance, a restaurant famous for its snake soup reopened last month in Wan Chai and is now paying HK$120,000 (US$15,454.15) a month, according to Centaline. When it closed in April last year, it was paying HK$300,000 a month for a shop in Causeway Bay’s Percival Street.