Local developer Emperor International Holdings (0163) expects rents in core retail districts of Hong Kong to rise 15 to 20 percent annually in the next few years as supply tightens.
The firm, which leases out retail space, said limited supply in popular business areas like Russell Street in Causeway Bay has significantly raised rents in the vicinity.
The group recorded rental increases of 10 to 20 percent in core districts like Causeway Bay and Tsim Sha Tsui in the past year, with one third of the stores having their leases renewed.
Donald Cheung Ping-keung, executive director of Emperor International, said the group will continue to focus on Tsim Sha Tsui, where it acquired a new property located on Haiphong Road in August.
As for non-core districts, Cheng expects a single-digit rise in rents compared with a 10 percent increase in the past year.
The group will put its shopping mall The Pulse in Repulse Bay up for lease soon after receiving the occupation permit on Monday. The 143,000-square-foot mall will be rented out at HK$50 to HK$60 per square foot, generating HK$70 to HK$80 million in revenue per year.
The firm has earned HK$4 billion from flat sales this year. It has received 20 percent of the funds and hopes to book the remaining 80 percent by the end of this year.