Hong Kong's cinemas squeezed out by luxury retailers
Chains forced to move upstairs or to smaller premises by luxury-goods shops willing to pay soaring rents for prime, street-level premises
Soaring rents are forcing cinema operators to downsize, relocate, or even shut down in prime districts, such as Causeway Bay.
And the immediate outlook for the industry is likely to get even bleaker as some landlords opt not to renew tenancies of cinemas on ground- or lower-level floors in shopping malls, in order to relet the space to luxury goods retailers who can pay much higher rents, letting agents said.
UA Cinema Circuit is reopening on the 12th floor of Times Square in Causeway Bay, having failed to secure the renewal of its lease on lower-floor premises with a street-level entrance; and at the IFC mall in Central, Palace IFC cinema and restaurants had little choice but to downsize or be edged out by luxury goods retailers after rents were raised by up to 40 per cent as leases came up for renewal.
"Put simply, a cinema operator can't keep up with rental spikes along Russell Street in front of Times Square, which is now full of shops selling luxury goods mainly to tourists from China," said Jason Wan, senior account manager at Centaline Property Agency.
"If you were a landlord would you rent high-premium premises on the street level to a cinema operator or go instead for luxury- goods retailers who can pay much higher rents?
Besides, times have changed," he said, and rather than pay more than HK$100 to watch a 3D movie in a cinema, more and more people were now opting to watch movies in the comfort of their own homes with their family members.