Burberry store in Hong Kong. Getty Images.
The city’s landlords have begun discussing rent increases with tenants in advance of upcoming lease renewals as its retail and financial sectors emerge from two years of social unrest and the pandemic, SCMP reports.
Hong Kong’s economy grew by 7.9 percent in the first quarter of 2021 — the biggest quarterly growth in 11 years and the end of six quarters of recession. Retail sales are also gaining pace; sales in the first four months of 2021 have grown an estimated 8.5 percent year-on-year.
Earlier this year, rents in Hong Kong fell to their lowest levels since 2003 and brands from Prada to Rolex shuttered key boutiques over the pandemic. Major retail streets including Causeway Bay’s Russell Street faced an all-time high vacancy rate as a result of the exodus; other brands nabbed long term leases at a bargain after rents plummeted.
Talks have been ongoing since February, Lawrence Wan, senior director for retail advisory and transaction services at the local arm of commercial real estate agency CBRE told the Post. Wan predicts that new or renewed agreements could be frozen for a year before increasing 5 to 10 percent in second and third years as the economy is further boosted by the return of tourists.