Rents in Hong Kong prime retail areas may fall further
Prime retail rents in Hong Kong could fall further when contracts are renewed even though the latest policy change to curb the number of visits by mainland Chinese is unlikely to have a big impact on overall retail activity, according to property consultants.
Permanent residents of Shenzhen are now limited to one visit to Hong Kong a week in a bid to deter parallel-goods traders.
Marcos Chan, the head of research for CBRE Hong Kong, Macau and Taiwan, said the new policy was unlikely to have a big impact on general retail activity in core shopping districts as most parallel-goods traders were only active in districts near the border, such as Sheung Shui.
But Kevin Lam, DTZ's head of business space for Hong Kong, said rents in prime areas would continue to drop due to reasons such as the stronger US dollar and Hong Kong dollar.
Lam said that changes in the spending patterns of mainland Chinese affected retail sales.
Rents for retail properties in prime areas had borne the brunt after sales for jewellery and watches as well as fashion and accessories dropped in the first two months of this year.
Rents could fall 10 to 40 per cent or more, DTZ said.