Economy Takes Hit as Regina Ip Calls for Retail Rent Reductions
The Current Landscape of Hong Kong's Retail Sector
Regina Ip Lau Suk-yee, a prominent figure in Hong Kong’s economy, has voiced concerns about the *retail* landscape. She has called on shopping centre owners to implement rent reductions to support ongoing business challenges. Recently, a visit to various shopping centres in the *Southern district*, including Marina Square, revealed more than 100 empty stores, sparking a discussion on the need for actionable changes.
Vacant Stores and Economic Shifts
The stark reality of empty shops highlights the ongoing struggle; 104 vacant stores were reported at Chi Fu Landmark, Marina Square, and Aberdeen Market. In contrast, the newly-opened shopping centre, The Southside, has seen bustling activity. This disparity denotes a broader transformation within Hong Kong's economy, as Ip noted: “The shopping malls in the *Southern district* are undergoing a major reshuffle to eliminate the weak and retain the strong.”
Implementing Change for Sustainability
- Ip emphasized the importance of introducing changes, discounts, and special events.
- Increased efforts are essential to drive foot traffic, especially on less frequented floors.
- The *overall consumption power* at Chi Fu Landmark remains average, despite high rents.
Consumer Behavior Post-Pandemic
The economist pointed out that consumer behavior has been shifting, with many opting to cross the border into mainland China for shopping and entertainment since the post-pandemic reopening. This trend is corroborated by a 9.7% drop in retail sales compared to last year, marking four consecutive months of decline.
The Future of Retail in Hong Kong
- Figures from JLL Hong Kong indicate a 11.1% retail vacancy rate as of the first quarter in 2024.
- This rate reflects a decrease from a peak of 18.5% but remains significantly above pre-pandemic levels.
Ip concludes that both shopping centres and merchants must embrace change to revive business dynamics in Hong Kong.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.