Hong Kong’s retail rents will post their first annual decline since 2008 this year as mainland Chinese shoppers spend less on luxury fashion and goods, according to Cushman & Wakefield Inc.
Prime street retail rents in Causeway Bay, home to the world’s most expensive shopping area, will fall 4 percent in 2013, Michelle Woo, Hong Kong-based executive director for retail at the realtor, said in a briefing yesterday. Those in the Central business district is projected to decline 3.5 percent, Woo said.
Retailers are expecting spending by Chinese shoppers to slow as pledge by the government to limit additional stimulus adds to the risk of a deeper economic slowdown, Cushman said. China’s economy grew 7.5 percent in the second quarter from a year earlier, slowing for a second straight period.
“Many brands already said they won’t open new shops in the second half,” Woo said. “People won’t blindly chase after retail spots now.”
Monthly rents in Causeway Bay, where companies including Wharf Holdings Ltd. and Hysan Development Co. operate shopping malls, fell 2.5 percent in the first half to HK$1,950 ($251) a square foot, the New York-based broker said. Central, home to Sun Hung Kai Properties Ltd.’s IFC Mall, recorded rent dropping 2.6 percent to HK$1,480, it said.