Hong Kong landlords to increase promotion budget to lure foot traffic
Fairly bleak news in the city’s retail sector has prompted Hong Kong landlords to increase promotions and events in their malls to attract foot traffic.
Sun Hung Kai Properties said it would increase its budget by about 9 per cent for promotions and events for its shopping mall next to Kwun Tong Station.
Maureen Fung Sau-yim, director of Sun Hung Kai Development (China), a unit of Sun Hung Hai Properties, said the company could spend HK$25 million, up from HK$23 million in previous year, on festive displays and marketing at its APM shopping mall as part of its Christmas promotions.
She expected the foot traffic would increase 6.3 per cent to 17 million in the next one to two months through this year’s theme of Snoopy attractions, Christmas spaceship , as well as gifts and souvenirs to shoppers.
During the third quarter shopping malls generally continued to perform well as rents rose modestly by 1.6 per cent, according to property consultants Savills. This compares to street shops in prime districts such as Causeway Bay where landlords suffering from a rent cut as much or more than 40 per cent as retail sales decline.
As availability remains tight in the malls, landlords still have some leverage, even if this is less than it
was even a few months ago, Savills said.
Fung of Sun Hung Kai said retailers would have a clearer picture of the impact of declining mainland shoppers on their businesses after Christmas and Chinese Lunar New Year holidays.
One negative indicator for prime malls has been the declining overnight visitors over the first eight months of the year, which saw a 5.3 per cent fall, according to Savills.
Savills said landlords of prime malls in core locations expect to see fewer anchors in future as retailers opt to reduce unit sizes to cut costs. Landlords can be expected to encourage this trend in order to maintain rents. “The logical result of such a strategy is to broaden the trade mix which may mean that we will see more new names, some from overseas,” said Savills.
But some shopping malls in the New Territories such as Tuen Mun Town Plaza and New Town Plaza in Sha Tin are benefiting from same day arrivals from the mainland, as well as healthy local demand.