The market for rented retail space in Macau will stall in the wake of the devastating Typhoon Hato which struck the city last week, further delaying any chance of a recovery in the sector, according to industry experts. The typhoon, which caused serious damage in the casino hub last Wednesday and claimed 10 lives, will also add to pressure on retail rents as tourists stay away from Macau. Retail rents have already tumbled 46 per cent by the end of the first quarter of this year from their peak in the third quarter of 2014, according to data from property firm JLL’s retail index. “The typhoon may delay the full recovery of the retail leasing market,” said Gregory Ku, managing director for Macau at JLL. “Everyone in Macau is focusing on cleaning up the debris and is hoping to resume normal business operations as soon as possible. No one will make a big move to buy or sell shops or flats now, the market will be very quiet for the next two months,” he said, noting that shop rents would also face a correction. In the residential market, however, the typhoon could stir demand for better-quality residential blocks on outlying islands that go for up to 10 per cent more than ageing ones on the Macau Peninsula. Ronald Cheung, director of real estate at Hong Kong and Macau-based asset management and trust firm Wisdom Capital Holdings, expects residential tenants to either ask for rent cuts when their leases come up for renewal, or to move to newer projects with better building safety. “It is too early to access the magnitude of the impact on the property market until there are deals concluded. But new renters who come from overseas will definitely go for good quality projects in Cotai,” he said. Residential prices have recovered recently, fuelled by local demand and short supply of new flats. They had dropped 19 per cent from a peak in March 2014 after the Macau government imposed an extra stamp duty of 10 per cent on home purchases by foreign buyers or corporations in late 2013, pushing many foreign investors out. But the government statistics and census service’s home price index reached 253 in the second quarter of 2017, above the previous peak of 251 in the first quarter of 2014. Prices for flats on the islands of Taipa and Coloane, where casinos and hotels such as Galaxy Macau, The Venetian and City of Dreams are located, recorded a 27.3 per cent increase in the second quarter of 2017 from a year before, the biggest price growth in the city. As most overseas staff work for casino or hotels, Wisdom Capital’s Cheung said he expected to see tenants move away from Areia Preta, the area on the Macau Peninsula that was severely damaged by the typhoon. One luxurious seaside residential tower in Areia Preta, La Cite, had many of its windows smashed during the storm. Three-bedroom flats of about 1,700 sq ft at La Cite are for rent at HK$14,000 to HK$15,000 per month, compared to HK$6,000 a month for old buildings on the Macau Peninsula, according to agents. With that budget, however, renters could only get a 1,200 sq ft flat at newer projects in Taipa, Cheung said.