Swire Properties is beginning to feel the chill from reduced spending by tourists, as the mall operator released 2015 figures showing a slowdown in retail purchases at both its luxury mall in Admiralty and its 20 per cent-owned outlet mall for popular brands in Tung Chung. Retail sales at The Mall, Pacific Place fell 12 per cent in 2015 from a year earlier, while sales at the Citygate Outlets fell 10 per cent on year. Swire Properties chief executive Guy Bradley said he expects the softening retail market will continue for the foreseeable future. Bradley attributed the lower retail sales at the malls to declines in the number of mainland visitors to Hong Kong. The glory days for retailers paying for skyrocketing rents have gone Thomas Lam, head of valuation and consultancy at Knight Frank Swire Pacific chairman John Slosar said: “We have to respond to the change in the market.” Swire Properties is the latest major shopping mall operator to release figures showing the depth of the slowdown underway in the retail sector. Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay, both owned by Wharf, reported sales plunged 12 per cent at each venue last year. These shopping malls, which mainly cater to mainland tourists shopping for luxury goods, suffered more than the broader retail sector, which saw retail sales in Hong Kong ease 6.5 per cent in January on year, according to data released by Census and Statistics department. Swire Properties owns 21.3 million square feet of offices, retail, hotels and serviced apartments in Hong Kong and mainland China. “We will try to broaden our customer base at Pacific Place and increase traffic by bringing in some exciting new concept restaurants,” Bradley said. Last month, the Sunday Morning Post reported that American-style diner Dan Ryan’s at The Mall, Pacific Place is due to close in April. Meanwhile, Cityplaza in Taikoo Shing, also controlled by Swire, which caters towards local consumers, registered solid sales performance. Thomas Lam, head of valuation and consultancy at Knight Frank, said falling retail sales usually means that landlords must pause on rental hikes or even reduce rents to keep tenants happy. “The glory days for retailers paying for skyrocketing rents have gone. Today, lots of developers who own shopping malls are repositioning themselves by reducing their reliance on tenants selling luxury goods,” he said. Among new trends, many shopping mall operators are looking to increase the number of food and beverage outlets, he said. Restaurants generally require larger spaces but are unable to afford the rents charged to high-end retailers during the mainland tourism boom. Lam said mainland Chinese were now bypassing Hong Kong in favour of destinations such as Tokyo, Seoul and Taipei, where they combine shopping and sightseeing. “It’s the new TST,” he said. “Shopping malls now face competition not at home but from an emerging competitor.” On Thursday, Swire Properties reported underlying 2015 profit fell 1 per cent on year to HK$7.07 billion, owing to a loss on the sale of four hotels in the UK. In a filing to the Hong Kong Stock Exchange on Thursday, the company said its hotels division incurred a loss of HK$303 million, of which HK$299 million stemmed from the sale of the British hotels. Turnover edged up 6.9 per cent year on year to HK$16.44 billion. The company declared a final dividend of 48 HK cents per share. Net profit for 2015, including revaluation gains on investment properties, jumped 48 per cent on year to HK$14.07 billion. Separately, Swire Pacific reported underlying profit edged up 2 per cent to HK$9.9 billion last year. The directors declared a second interim dividend of HK$2.78 per class A share andȼ55.6 HK cents per class B share. Swire Properties’s shares fell 1 per cent to close at HK$20.80 following the results announcement, while Swire Pacific’s class-A shares ended little changed at HK$79.85 .