Hong Kong might see 90 per cent of mask shops close, freeing up 150,000 sq ft of retail space, after face-covering mandate ends

Removal of mandate comes about a month earlier than expected, Bridgeway Prime Shop Fund Management CEO says
Shops in popular districts will all be taken by June with mainland Chinese travellers flocking to the city: Ricacorp executive

Hong Kong property

Lam Ka-sing

Published: 8:30am, 1 Mar 2023

Why you can trust SCMP

Hong Kong might see up to 90 per cent of mask shops – estimated at 300 currently – close by the end of next year after the city all but ended its mask mandate after almost 1,000 days, freeing up 150,000 sq ft for other businesses.

“I estimate that as Hong Kong returns to normal, 90 per cent of mask shops will eventually close down,” said Edwin Lee, founder and CEO of Bridgeway Prime Shop Fund Management. “But not right away, because landlords need time to find new tenants with long-term leases.”

Hong Kong leader John Lee Ka-chiu announced on Tuesday that the city’s indoor, outdoor and public transport mask requirements would be scrapped from March 1. People entering high-risk premises, such as hospitals, would still be required to wear face coverings.

The removal of the mandate came about a month earlier than expected, Bridgeway’s Lee said. There are currently about 300 mask shops across Hong Kong’s 18 districts, most of them on short-term leases, he added.

Can Hong Kong reclaim luxury retail market crown?

Their rents are about 70 to 80 per cent cheaper than before the coronavirus pandemic, Lee said. Some rents are as low as HK$100,000 (US$12,739) per month in Russell Street, once the priciest retail strip in the world commanding rents in millions per month.

Not everyone will stop wearing masks after Hong Kong dropped its mandate, as seen in Macau, Lee said. About 30 per cent of the shops will close by the end of March, with a further 20 per cent by the end of June, he added. About 70 per cent will close by the end of this year and 90 per cent by the end of next year, Lee said.

01:47

Hong Kong to scrap Covid mask mandate for indoors, outdoors after 3 years of pandemic

About 30 mask shops might stay open, with most concentrated in core districts and selling masks with special designs, he said. Assuming that an average mask shop has an area of about 500 to 700 sq ft, the total area of newly vacated shops will be about 150,000 sq ft, Lee said.

One major mask manufacturer is turning to businesses ranging from investment to restaurants, after making huge profits over the past few years, according to Dennis Cheng, senior sales director at Ricacorp (CIR) Properties.

Mask shops are resorting to buy-one-get-one-free sales to clear stock, as more than 80 per cent of Hongkongers are expected to stop wearing masks, Cheng said.

Are the glitziest days over for the world’s most expensive retail strip?

Shops in popular districts will all be taken by June with mainland Chinese travellers flocking to the city, he added. Retailers catering to this group, including pharmacies, cosmetics and fashion brands, are looking for spaces, Cheng said.

Sheung Shui, which is near the border with mainland China and has rampant parallel trade, is currently the hottest shop market, Cheng said.

The monthly number of shop leases shrank dramatically from about 700 between 2010 and 2014 to just about 350 last year, said Rickey Chan, managing director of local property agency Dorbo Realty. This number could rise to over 450 after mid-2023, back to levels seen in the second quarter of 2018, after the outbreak of the US-China trade war, he added.