Hong Kong’s street shop vacancy stays high amid restaurant failures: Midland report
Restaurant, F&B shutdowns kept third-quarter vacancy rate at the highest level since September 2020, Midland report says
More enterprises are quitting the retailing scene in Hong Kong’s four core business districts, as consumers are spending more in mainland China, pushing the vacancy rate of shops to the worst level in almost four years. Even expansion by Giorgio Armani, Mango and Prada is not expected to quickly turn things around.
The number of vacant high-street shops in Central, Causeway Bay, Mong Kok and Tsim Sha Tsui rose to 874 in the third quarter from 720 in the first quarter, Midland IC&I said in a report on Wednesday. The vacancy rate climbed to 11.7 per cent, the highest since 12.6 per cent at the end-September 2020.
The agency, also known as Midland Commercial, publishes the sector report in March and September every year.
“Changes in the local population structure and people travelling north for consumption have caused the local livelihood to weaken,” chief sales director Andy Kong said. Given these trends, “retailers are cautious about opening new shops”, he added, citing many restaurant shutdowns.
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Restaurant operators in the four core districts were unable to withstand fierce competition. Food and beverage outlets saw 56 shutdowns over the past six months, the report showed. Some 52 non-Chinese restaurants surrendered their leases, while Chinese restaurants and beverage takeaways suffered nine each, Midland said.
Heightened competition in the retail and restaurant sectors will continue to keep high-street shop vacancy rates elevated at between 11.5 per cent and 12.5 per cent through March next year, Midland added. As a result, shop prices and rents could hit new lows in the coming months.