Hong Kong has the advantage of NO
luxury tax so for luxury goods, items are cheaper in Hong Kong than in
percent of handbags and 75 percent of watches sold in Hong Kong"
were bought by those from over the border. A mainlander staying
overnight spends 73 percent of their money on shopping"
by Ben Oliver
tariffs run as high as 45 percent for cosmetics and 43 percent for
high-end watches, driving many rich consumers to shop in Hong Kong,
London and Overseas, a trend that the Chinese commerce ministry wants
to change, according to media reports. Meanwhile though
its affecting Hong Kong Retail rents and rents in Causeway Bay exceed
$1,510 (USD) per square foot. --
Causeway Bay rents set to rise with new mega mall Strong
pre-leasing at new Causeway Bay retail - Hysan Place
Hong Kong's Causeway Bay, home to the world's third-most expensive shopping strip, is set for its biggest
facelift in almost two decades with a new mall that may drive up rents in the area.
Upmarket: Prime street shop rents on Russell Street
have increased 34% in Q1 compared with a year earlier
Hysan Development Co, the area's biggest commercial landlord, next year
will complete a complex the size of 12 American football fields in the
district's biggest addition since 1994, when Wharf Holdings Ltd's Times
Square put the area on the luxury retail map.
About 45 per cent of Hysan Place's retail space is already filled with
tenants that may include Apple Inc.
'2011 will probably be the year of Causeway Bay,' Nick Bradstreet, Hong
Kong-based head of leasing at Savills Plc, said in an interview.
'Hysan Place will bring huge interest to the area. Rentals on a lot of
the neighbouring streets are going to come up because of that.'
Increased spending by cashed-up Chinese tourists and the addition of
new shopping space will drive up prime street shop rents in some parts of
Causeway Bay, a former fishing village, by as much as 50 per cent this
year, according to Jones Lang LaSalle Inc, the world's second-biggest
Causeway Bay's Russell Street has the world's third-most expensive
retail space after Manhattan's Fifth Avenue and Avenue des Champs-Elysees
in Paris, according to Colliers International.
Hysan, which owns about three million square feet of office and retail
space in the area east of the Central district, is scheduled to complete
construction of the 710,000-square- foot Hysan Place in the second quarter
Average rents at prime street retail shops in Causeway Bay rose to
HK$910 (S$146) per square foot in Q1 from HK$833 in Q4 2010, according to
'Rental in this area probably won't go back to what you'd consider
reasonable in a conventional sense for a while,' Hysan chief executive
officer Gerry Yim said in an interview.
'Retail rents reflect shops' turnover and from what we see, businesses
in Causeway Bay are going to stay robust for a long time.'
Hysan is also completing the renovation of 26,000 square feet of ground
floor retail space at the 34-year-old nearby Leighton Centre.
'The benefit of these renovations they're carrying out right now will
begin to show down the years,' said Eva Lee, a Hong Kong- based property
analyst at Macquarie Securities Ltd, who recommends investors to buy the
'With the tight supply of both office and retail space, the opening of
Hysan Place is exceptional timing.'
Hong Kong's biggest commercial landlords have outperformed residential
developers in the past year. Hysan's shares have risen 72 per cent since
the beginning of 2010 while Wharf has added 24 per cent.
By contrast, Sun Hung Kai Properties Ltd and Cheung Kong (Holdings)
Ltd, the city's two-biggest residential developers, have risen 2.2 per
cent and 15 per cent respectively.
Hysan shares rose 1.2 per cent to HK$37.95 at the 4pm market close
here, compared to a 0.8 per cent advance in the Hang Seng Property Index,
which tracks the performance of the city's seven biggest developers and
doesn't include Hysan.
Causeway Bay, a fishing village in the city's early colonial days, is
now a bustling hub where fishball and juice sellers, mobile phone shops,
luxury watch retailers, and local-designer brands are squeezed next to
shopping malls that house European luxury brands such as Gucci and Louis
Vuitton, and Japanese clothing and accessory chains including Muji and
Uniqlo. Times Square overlooks a meat, vegetable, and fruit market.
'Hysan Place will attract a slightly different crowd to the area'
compared to Times Square and other malls owned by Hysan, said Helen Mak,
Hong Kong- based head of retail at Colliers.
'It's catering more to the younger generation, whereas many of the
outlets selling luxury goods in the district are aimed at mainland Chinese
Chinese tourists visiting Hong Kong jumped 26 per cent to 22.7 million
in 2010 from a year earlier, according to the city's tourism board. The
figure reached a daily record of 122,893 on April 30 this year, according
to the organisation.
Prime street shop rents on Russell Street have increased 34 per cent in
Q1 compared with a year earlier, according to Savills, the UK's largest
publicly traded property broker.
Retail sales at tenants in Times Square rose 25 per cent in 2010 on
increased arrivals and spending by Chinese visitors, according to figures
Retail rents in Tsim Sha Tsui, a shopping and commercial district on
Hong Kong's Kowloon Peninsula, last year climbed as much as 25 per cent
after the opening of three new shopping malls including New World
Development Co's K-11 and Chinese Estates Holdings Ltd's The One.
Hysan Place may have the same impact on shop rents in Causeway Bay,
starting with its nearby streets, according to Savills, Colliers, and
Causeway Bay is about a seven-minute subway ride from Central. Hysan in
2010 derived 43 per cent of its gross profit from office rental and 41 per
cent from its 900,000 square feet of retail space, according to its annual
'Shops without a very high turnover will be gone in the long run,' said
Hysan's Mr Yim from the company's office on the 49th floor of the Lee
Gardens Building, which overlooks the area.
'Recently a fruit-seller closed down and chances are that these kinds
of retailers won't be back. The whole area is going through another
transformation.' -- 2011 May 19 Bloomberg
Luxury brands to force local retailers out of prime sites
A sensible pair of shoes
or basic household items may become increasingly hard to find in Hong
Kong's prime retail districts as wall-to-wall luxury brands force out
Property consultants say home-grown retailers are being driven out of Hong
Kong's prime shopping districts by big- and mid-range luxury brands which
are rapidly building up their presences in the city.
Lured to Hong Kong by the acceleration in local retail sales and the
growing number of wealthy mainland China shoppers who visit the city,
overseas and larger domestic retailers are bidding aggressively for prime
locations within which to expand their retail footprint.
Since new supply is limited, less competitive players are being forced to
move to suburban shopping centres where rents are lower.
With their business network and financial ability, big global brands
usually outbid local players, said Joe Lin, senior director of retail
services for CB Richard Ellis (CBRE).
The result is already visible in the shift in the retail mix in Hong
Kong's leading shopping malls and shopping precincts toward international
luxury brand retailers.
"So local retailers will disappear from prime shopping districts and
they will be forced to move to sub-districts," Lin said.
Given the city's cosmopolitan image as well as product reliability, Hong
Kong has long been attractive to luxury brand retailers.
That can be shown in the property consultant's newly released survey.
Hong Kong has maintained its position as the most popular destination for
luxury retailers, with 84% of the luxury brands covered in the 2011
edition of CBRE's "How Global is the Business of Retail?"
present in the city.
CBRE's annual survey — now in its fourth year — mapped the global
footprint of 323 of the world's top retailers across more than 200 cities
to identify trends in global retail expansion at national and local
levels. Hong Kong has ranked number one in the past four years in terms of
having the highest percentage of global brands present in the city.
"Hong Kong's ranking reflects the continuing love affair that local
residents and increasingly visitors from mainland China have with luxury
fashion," said Nick Axford, head of Asia-Pacific research for CBRE.
Hong Kong's retail sales have been driven higher by the improving domestic
environment and the robust economic growth in China. More than 22 million
China tourists visited Hong Kong last year, accounting for 63% of the
total number of visitor arrivals.
Apart from luxury brands, there is a new wave of mid-ranged international
brands coming to Hong Kong, a new source of pressure to drive local
players out of the prime shopping areas.
"Rental is not their major concern. Because of the Hong Kong
currency, international brands are willing to pay the rising rents in Hong
Kong. It is limited space that is the issue," Lin said.
Lin recently introduced some mid-ranged global brands to landlords of Hong
Kong's major shopping arcades.
But even though the clients were interested in having a local presence,
they could not find space at the time.
When will home-grown retailers be totally extinguished from prime shopping
Helen Mak Hoi-lun, director of retail services at Colliers International,
said there was no easy answer to that question.
"But the trend is under way. We have seen some home-grown fashion
retailers such as G2000 facing mounting competition from international
brands such as Zara and H&M," Mak said.
"I recently brought one international retailer to visit the major
shopping malls. They were curious to know why most of the shops were
global brands," she said.
Other examples of local retailers being forced out of prime shopping areas
include US-based fast fashion retailer FOREVER 21 taking up space formerly
occupied by local brand Giordano in Capitol Centre in Causeway Bay, and
German luxury goods brand MCM taking over space previously occupied in
Entertainment Building by another local clothing brand, Episode.
But some home-retailers that
offer iconic cultural merchandise, such as Kee Wah Bakery that sells
traditional bakery products such as mooncakes and bridal pastries, may be
more difficult to dislodge from their premises, Mak said.
Both Lin and Mak believe that the trend will nonetheless continue in the
wake of the continued growing retail sales and rising mainland shoppers. —
2011 April 19 SCMP
--2011 March 31
The jump in retail sales has driven up
prices of prime retail
Second floor shops in Mongkok, a
secondary retail location are going to market for sale at up to $132,000
per sq. ft.
-- 2011 March 9
>> ARTICLE SOUTH
CHINA MORNING POST
A company run by Hong Kong's best-known
entertainment mogul has paid a record 108 million US dollars for a shop in
one of the busiest shopping districts.
The sale of the 1,212 square foot
outlet comes as the city's government tries to contain soaring property
costs due to fears they are getting out of control. The price works out to
about 90,000 dollars per square foot, making
it the city's most expensive retail space, the South China Morning Post
reported, quoting an unnamed source. "It is unknown if
this is now the most expensive shop in the world, but obviously it's a
record in the city," real estate agent Lawrence Wong told the daily
The shop in Hong Kong's busy Tsim Sha
Tsui district houses luxury retailer Emperor Watch & Jewellery, which
is run by music tycoon Albert Yeung, the Post said. Yeung's
Emperor Entertainment Group has contracts with a host of Cantonese pop
stars who claim legions of fans in the city of seven million. An Emperor
subsidiary, which had been leasing the space, bought the property because
of "the investment value of the location and a basic need for the
shop," the source told the paper. The previous record for a Hong Kong
retail space was set in May by Yeung's brother Ricky, who paid 58,000
dollars US per square foot for a shop in the same neighbourhood, the Post
said. - 2009 December
A study that shows Hong Kong retailers
are abusing their dominance has reignited calls for a competition law.
In the study, the Chinese University of
Hong Kong (CUHK) polled more than 120 suppliers and found that almost a
third are barred by retailers from working with their competitors.
Of the suppliers surveyed, 32.2 per cent
said they have been forced to accept a retailer exclusively, while 38 per
cent are made to restrict goods they supply to other retailers.
Suppliers are also forced to share
promotion fees, cut their prices and bear responsibility for damaged goods.
The suppliers surveyed come from the food
& beverage, cosmetics, household products and pharmaceutical sectors,
and provide goods for supermarkets and drug stores - two retail industries
dominated by just a handful of players.
'Supermarkets in Hong Kong seem to have
very large powers to dominate the market and also force the suppliers to do
something they want,' said Sin Yat-ming of the university's marketing
department and one of the authors of the report. Hong Kong needs a
competition law to level the playing field, he said. 'To me, this (survey)
is a signal - we have some hard evidence there exist some unfair practices
in the retail industry. There's definitely some unfair competitive
The government has been urged for decades
to introduce a competition law, amid anecdotal evidence of flagrantly unfair
behaviour in the retail industry.
French supermarket chain Carrefour pulled
out of Hong Kong in the late 1990s after four years of losses in a market
dominated by two large players. Carrefour complained that it was not given
prime locations and gave details of companies which, it claimed, pressured
it into not cutting prices.
Pressure on suppliers was also suspected
as one of the reasons that publishing magnate Jimmy Lai pulled out of the
retail market in 2000. His Internet retailer Admart triggered a fierce price
war, but ceased operations as profits took a nosedive.
'The phenomenon (of anti-competitive
practice) has been discussed within the industry,' said Prof Sin. 'But
people always keep saying it's a particular case. It seems not many
suppliers are willing to stand up and speak out.'
The size of a supplier does not seem to
make any difference. The study found that big companies supplying retailers
are subject to even more restrictions and demands than smaller players.
Hong Kong is a city dominated by a
handful of powerful players - in the power and property industries, for
example. Consumer groups have long called for legislative measures to outlaw
any abuse of their position.
A consultation exercise on the topic was
completed last year but it is unclear whether the government intends to
proceed with a territory-wide competition law or go for a sector-specific
'At least we would have a system, some
kind of mechanism, in case there are any abusive practices,' Prof Sin said.
A law would also have a potent deterrent effect, he said. 'But right now, we
don't have such a system so all these retailers can say is that they have
not violated the law.' - by Jane Moir
BUSINESS TIMES 2007 March 20
the retail boom
Hong Kong's overheated
retail leasing market cooled in the fourth quarter of last year as many
store owners adopted a wait-and-see approach after the recent spate of
Hong Kong's overheated retail
leasing market cooled in the fourth quarter of last year as many store
owners adopted a wait-and-see approach after the recent spate of rental
However, rapid rent increases for prime high
street outlets in Causeway Bay, Mong Kok and Tsim Sha Tsui have benefited
more affordable, second- tier streets in these districts, as some store
owners have moved to more affordable premises nearby to minimize costs.
Overall, retail rents edged up by 2.9 percent in
the fourth quarter of 2005, with Central recording the largest rise at 4.5
percent. Mong Kok registered a mild increase of 2.2 percent, following its
significant rise in the third quarter.
Buoyed by continued upbeat consumer sentiment and
record numbers of tourists, total retail sales were provisionally estimated
at HK$15.8 billion in November, up 4.2 percent from a year ago.
After taking into account the effect of price
changes over the previous 12 months , retail sales rose by 3.6 percent year
on year. While sales overall grew at a steady pace, alcohol and tobacco
registered the largest boost, jumping by 10.6 percent, followed by sales of
Chinese drugs, herbs and fuels.
According to the Census and Statistics Department,
improving economic conditions and record employment are helping to lift the
average household income in Hong Kong.
These factors are feeding through to higher levels
of consumer confidence, more so than in recent years, despite the interest
rate hike cycle. Private consumption expenditure grew by 4.6 percent in real
terms in the third quarter of 2005 over a year earlier.
The retail industry is expected to remain strong
in 2006, supported by a high level of consumer confidence in the economy and
optimism about an end to the interest rate hike cycle.
Despite the seasonal slowdown in the retail
leasing market, restaurant owners have opened new outlets in major shopping
In Causeway Bay, the renowned South Beauty
Restaurant took up about 17,210 square feet in Lee Theatre Plaza for its
first outlet in Hong Kong. Nanxiang Steamed Bun Restaurant, meanwhile,
leased about 4,000 sq ft in Causeway Bay Plaza 1.
Elsewhere, high-end retailing was also evident as
Chanel reopened its store in Prince's Building in Central with an expanded
take-up of 6,500 sq ft over three floors. The revamped outlet is slated as
the boutique's Hong Kong flagship.
Also within the review period, Louis Vuitton
launched a 10,000 sq ft flagship store at The Landmark.
This is the luxury brand's fourth global flagship
outlet after openings in Paris, Tokyo and New York. The facelift for the new
boutique includes a contemporary, large-scale glass facade, a popular
feature in recent Central upgrades.
At Admiralty, the 50,000 sq ft Lane Crawford store
reopened in Pacific Place after months of renovation.
The new outlet has strengthened the department
store's position as a top-end retailer with a new look for its upgraded
interior while also offering a broadened trade mix.
Due to Hong Kong's booming retail market in 2005,
many shopping center landlords began revamping their stores in order to
maximize rental income. For instance, in the basement of Silvercord in Tsim
Sha Tsui, the landlord has successfully sub-divided the ex-Muji space into
77 shops, with a gross floor area of about 14,000 sq ft, targeted at young,
The revamped retail space is being referred to as
vim@silvercord, with average shop sizes ranging between 200 sq ft and 300 sq
ft at monthly rents of HK$150-$200 psf.
It's expected that vim@silvercord will enhance
Silvercord as a shopping center for the young and trendy, as the ambience
created by the revamped basement will bring in more teenager merchandise.
While vim@silvercord has the advantage of
attracting more shoppers by providing more diverse merchandise for the
landlord, the substantial rent increase is the best news.
According to the landlord, most of the shops were
committed and opened before last Christmas.
Aside from vim@silvercord, the same landlord also
plans to sub-divide the basement of Windsor House in Causeway Bay in the
fourth quarter of this year. -
Andrew Ness is executive director, CBRE Research, Asia.
STANDARD24 March 2006
Lane Crawford International is responding to
incursions on its home turf by the likes of famed retailer Harvey Nichols
with an aggressive and high-profile expansion in Central.
The upmarket department store operator will invest
$100 million in a new, 80,000 square foot flagship store at the IFC Mall in
Central, according to a source familiar with the company's plans.
"It will be Lane Crawford's largest
investment in the region since the Asian financial crisis in 1997," the
Venerable Lane Crawford, established 153 years
ago, continues to be frequented by Hong Kong's rich and famous. It was
privatised by Wheelock & Co in 1999. Last year, it was sold to a family
trust linked to Wheelock chairman Peter Woo Kwong-ching.
Under the helm of Mr Woo's daughter, Jennifer Woo,
Lane Crawford's IFC Mall outlet will be its largest. It is conceived as an
"international fashion centre" concept store that will offer more
than 1,000 designer labels. It is understood the retailer's current flagship
store and city landmark, Lane Crawford House on Queen's Road Central, will
"[Lane Crawford's new store] will be totally
different from its four existing ones," the source said. "Lane
Crawford will bring the new concept to China with Beijing as its next
target." Lane Crawford also has an outlet in Shanghai, and franchised
operations in Hangzhou and Harbin.
According to the source, Lane Crawford's new
flagship will occupy one floor and will be linked by a corridor to the new
Four Seasons hotel, where a VIP zone earmarked for fashion shows and other
functions will be created. The 1,000-room, six-star Four Seasons is
scheduled to open next year at the IFC complex.
These and other details will be officially
announced next month, with an opening scheduled for later this year. A Lane
Crawford spokesperson declined comment, saying only that the company's plans
had not been finalised.
Last year, rival luxury retailer Dickson Concepts
(International) announced a $100 million investment to launch a 60,000 sq ft
Harvey Nichols store at The Landmark, also in Central.
Colliers International research director Simon Lo
said the aggressive expansion plans of luxury retailers such as Lane
Crawford reflected their strong confidence the retail market.
"Luxury retailers are willing to spend a
fortune for their new flagship stores to prepare for a rebound in the
market," Mr Lo said, adding a growing number of international retailers
are looking for flagship premises in prime locations.
In addition to bringing Harvey Nichols to The
Landmark next year, Dickson Concepts is also opening a $50 million Seibu
department store and a Dickson Watch and Jewellery shop this year at Langham
Place in Mongkok.
Lane Crawford's investment comes as Hong Kong's
68-month descent into deflation appears to be ending, and the continued
influx of mainland tourists breathes new life into the retail sector.
Retail stocks have been among Hong Kong's best performers this
year, and there may be more good news up ahead for them as the economy
continues to rebound and mainland tourists keep flooding in.
One of them is Sa Sa International, the main
board-listed cosmetics retailer that sells two of every five bottles of
perfume in Hong Kong.
The company lost money a few years ago but made a
dramatic turnaround when it recently reported a 121 per cent surge in
profits for the year ended March.
Its share price has risen 39 per cent so far this
year, against a 3.5 per cent fall in the Hang Seng Index.
The company derived 60 per cent of its revenue
from local consumers when it listed in 1997, and mainland consumers
accounted for almost none of the rest.
Seven years later, mainlanders were responsible
for 35 cents of every dollar of sales last month.
``We also witnessed healthy growth in our shops at
non-tourist areas,'' said chief financial officer and executive director Guy
``That is a very encouraging sign ... that even
local consumers are spending more.''
The consumption-dependent Hong Kong economy has
enjoyed double-digit retail sales growth in recent months and registered the
highest monthly growth rate since 1992 when it posted a 23 per cent
year-on-year gain in April.
Not surprisingly, many listed retailers saw
profits shoot upwards as well, tripling in some cases.
``We continue to like the sector but will need to
focus on valuations,'' said Flavia Cheong, fund manager at Aberdeen Asset
Management in Singapore, who pointed out the strong balance sheets of many
``The valuations are reasonable at current
Retailers hit bottom during the Sars outbreak last
year as consumers cut spending and tourists vanished.
The gloom began to lift when Beijing eased
restrictions on mainland tourists last July, prompting hordes of
free-spending tourists to flood into the territory.
According to Kingston Lee, Hong Kong and China
research head at ING Financial Markets, some 1.7 million tourists visited
Hong Kong in May alone, four times the number who came last year, and 27 per
cent more than May 2002.
Overall, the number of mainland visitors grew 79
per cent from May two years ago.
After years of rapid growth, plenty of mainlanders
have money to spend.
And they are attracted to goods sold here - even
if they are produced on the mainland - because Hong Kong products have a
reputation for quality and authenticity.
``It's a credibility issue,'' said Vincent Chow,
director and group general manager of Chow Sang Sang Holdings International,
which generates more than 50 per cent of its revenue from mainland tourists
at shops located in areas such as Tsim Sha Tsui and Causeway Bay. ``They
[mainland tourists] know what they get is genuine, an important factor for
Chow reckons the average mainland tourist spends
about HK$3,500 at their shops, though some market sources said six-digit
transactions are not uncommon these days.
``Mainland tourists provide a major force,'' said
Sophia Lee, analyst at Oriental Patron Securities.
``Hong Kong consumers are also becoming more
confident of the economy.''
BNP Paribas Peregrine regional consumer analyst
Mohan Singh said the decline in unemployment, fewer personal bankruptcies
and fewer homeowners whose flats are worth less than their mortgages have
also helped boost spending.
The bilateral Closer Economic Partnership
Arrangement (Cepa) also helped to inject confidence in the economy.
``This in turn helped boost consumption desire in
general and that contributed a lot to our outstanding performance in Hong
Kong,'' said Kathy Chan, director of finance and executive director of
casual wear retailer Bossini International, whose latest results showed a
reversal of fortunes, from a HK$78 million loss to a HK$118 million profit
Mohan Singh noted that retailers last year brought
forward their summer sales because of Sars.
This year, the sales were delayed until last
month, helping boost retailers' margins.
``There was no pressure to rush [the sales] as
retail sentiment has rebounded,'' Mohan Singh said, adding that operating
margins also improved as retailers have kept tighter controls on costs.
Chan of Bossini said a change from a sales-driven
strategy to a profit-driven strategy has also paid off.
``It led to various cost-control measures,
including restructuring of our sales network, mainly [through the] closure
of non-profit making outlets, reduction in advertising expenses and more
stringent inventory and margin management,'' she said.
Building a strong brand franchise also helps
retailers bring in customers.
All said, there are still challenges ahead.
``There will be some pricing pressure going
forward if rental costs increase,'' Aberdeen's Cheong said.
Mohan Singh said rental pressure will be a concern
for Hong Kong retailers this year. However, retailers will continue to
prosper so long as sales increases outpace rent rises.
With the end of close to a six-year deflationary
spell on the cards, wage cost pressures will also start to emerge as the
economy recovers. Analysts expect retailers will start passing the increased
costs on to consumers.
``We have only slight adjustments in prices and
there should be some room,'' said Bossini's Chan, who also expects the cost
increases to be more than offset by the increases in revenue as the economy
continues to improve.
Many retailers have also expanded or begun
expanding into the mainland.
Chow Sang Sang, which now runs 34 stores on the
mainland and will have 43 by the end of the year, is going on an aggressive
``We plan to add one new shop in China every
month,'' Vincent Chow said. ``We will have close to 100 shops in China in
Given all this optimism, it is no surprise retail
stocks remain in favour among fund managers.
``Corporate profitability, as measured by return
on equity, still looks attractive,'' said Ginie Lam, head of investment
communications at fund manager Invesco Asia.
``In much of Asia, with some notable exceptions,
we have not seen pricing power being destroyed by over investment.''
``As long as Asia maintains its corporate
profitability at or around present levels,'' Lam said, ``it will continue to
look attractive in a global context.'' - by
Vanson Soon THE
STANDARD27 July 2004
Retail rents succumb to sluggish economy
Shop rents in prime retail areas fell an average
4.2 per cent in the third quarter amid the sluggish economic conditions,
according to CB Richard Ellis.
Rents in Tsim Sha Tsui fell 4.8 per cent, those in
Mongkok 5.9 per cent and Causeway Bay 5 per cent, the property consultant
said. Central bucked the trend with a 1.2 per cent rise.
Retail rents were expected to fall further during
the rest of the year despite stable leasing activity in the near term.
However, some retailers, including fast food
restaurants and cosmetic outlets, were seeking retail space in prime areas
to prepare for the traditional peak season of Christmas and New Year.
Competition within the retail industry had
intensified in the face of the slow market conditions. Many landlords had
embarked on major renovations in order to attract potential customers and
the consultant expected to see landlords more prepared to negotiate on
The amount of vacant retail space would rise
following the closure of bank branches in some prime areas by the end of the
year, the consultant said. - South
China Morning Post October 25, 2001
Price plunge pumps-up flats sales
Property transactions picked up significantly last
month to the highest volume in eight months, as developers sought to boost
the market with a series of price discounts at key projects.
Deals registered with the Land Registry last month
rose 87.6 per cent to 9,723 compared with October, according to government
However, the value of transactions increased just 18.3 per cent to HK$16.8
billion, reflecting the fact that most properties were sold at low prices,
The volume increase represented a recovery from
the exceptionally poor market in October, which was hit hard by the
September 11 attacks, but it was doubtful whether the strong sales record
would continue in view of the economic downturn.
The transaction volume in October was 5,183, the
worst recorded since February.
Property agents said last month's pick-up was
driven by strong new home sales as developers cut prices to attract buyers.
Midland Realty estimated private residential
transactions jumped 321.4 per cent during the month to 3,548 but secondary
market deals rose only 22.8 per cent to 4,534.
Centaline Property estimated the new private home
sales of less than HK$20 million amounted to 3,626, the highest for 30
Properties offered for sale during the period were
mainly smaller flats of HK$1 million to HK$3 million each, Centaline said.
These included Cheung Kong's Caribbean Coast in
Tung Chung; Villa by the Park in Yuen Long, developed by Sun Hung Kai
Properties; New World's Sereno Verde in Yuen Long and Horizon Place in Kwai
Chung, developed by Sino Land.
Centaline said last month's pick-up was the result
of various incentive schemes offered by developers and low interest rates.
But some analysts expressed reservations whether
such an increase could be sustained in the first quarter next year following
growing job insecurity and the global economic downturn.
"We still can't see the upside of the
property market because of the oversupply of flats," Dao Heng
Securities property analyst Eric Yuen said.
He said the increase in transactions should not be
taken too seriously as a signal of recovery in the property market, saying
many of the primary transactions were less than HK$2 million.
Mr Yuen said falling interest rates emerged as the
main driving force for the increase in transactions.
"Many developers released their new
developments after October with low prices and attractive mortgage-subsidy
plans," Mr Yuen said.
"There's no surprise that the property market
has become more active since then."
ABN Amro property analyst Anton Kwang expects the
residential market to remain soft, saying despite Sun Hung Kai Properties'
high-profile plan of raising prices by between 3 and 5 per cent,
medium-sized developers were slashing prices to move inventory. He believes
Sun Hung Kai Properties will throw in new incentives after lifting
"face price" so the net selling price is unchanged.
- by Richard Woo and Doris ChanSouth
China Morning Post
December 4, 2001