More foreign brands and restaurants debut in western New Territories
New Territories attracts retailers as sales volumes, shopper numbers rise
A growing number of foreign brands and restaurant operators are making their debuts in the western New Territories where regional malls are notching up solid sales growth, according to industry experts.
Hurt by a slump in the number of big-spending mainland tourists, retail property owners in traditional tourist areas such as Causeway Bay, Tsim Sha Tsui and Central have forced some individual landlords to cut rents by up to 50 per cent.
However, the retail landscape in the western and northern New Territories is different.
"We have not received any requests for rent cuts," said Jessica Wong, assistant general manager for leasing at Sun Hung Kai Real Estate Agency. She heads a retail portfolio covering Yuen Long, Tsuen Wan and Kwai Fong.
Sales volume and numbers of shoppers have each risen 10 per cent so far this year, she added.
Wong said about 40 per cent of the fashion and accessories brands at its soon-to-be opened Yoho Mall in Yuen Long were first-time entrants in the western New Territories.
"Our new mall is not only targeted at residents in Yuen Long but also the 1.5 million people in the northwestern New Territories," she said.
Foreign brands such as Victoria's Secret, Cath Kidston and Hollister will open their first outlets at Yoho Mall in Yuen Long.
The 1.1 million square foot Yoho Mall is due for completion by the end of next year. The first phase of 600,000 sq ft has been fully let to 200 retailers at a rent of HK$50 to HK$150 per square foot per month. The phase one development, which will open on September 1, is expected to generate HK$200 million rental income for the first year.
Wong said some shops with new retail concepts and designs were being charged lower monthly rents than existing malls in the area.
"We hope to receive a better rental turnover based on our tenants' sales revenue," she said.
In addition, about 30 restaurants, accounting for 25 per cent of the total mall space, could drive up shopper traffic.
Joe Lin Chi-ho, an executive director of retail services at CBRE, said regional malls would be less affected by weakening sales.
"Most tenants are selling mid-priced products and address local residents' daily necessities. Some famous fashion brands will also open bigger stores in New Territories shopping malls [to escape] soaring rents in core districts," he said.
At Yoho Mall, H&M will open a 22,000 sq ft store while Zara will add one 18,000 sq ft shop.
Lin said the advantage of Yoho Mall was that it is located at West Rail's Yuen Long Station where it could draw a critical mass of customers.
"For a new mall, rents should be more competitive as retailers see it as a testing ground for their business," he said.