Street shop rents could fall up to 20pc, warns CBRE

Kevin Xu

Street shop rents in core retail districts in Hong Kong are estimated to plunge 15 to 20 percent this year, as there seems no end in sight to months of social unrest, combined with other economic and geopolitical uncertainties, said commercial real estate services and investment firm CBRE.

Lawrence Wan, senior director for advisory and transaction services in retail for CBRE Hong Kong, also expects vacancy rates in core retail areas to increase after the Lunar New Year.

Drug stores, jewelry and watch retailers will continue to reduce the number of unprofitable shops, Wan said.

CBRE also expects grade A office rents to drop by 5 to 10 percent this year.

In the primary market, a 2,023-sq-ft luxury house in Discovery Bay sold for HK$55.23 million, or HK$27,300 per sq ft, by tender.

A 3,655-sq-ft luxury house at Mount Regalia in Sha Tin changed hands for HK$116.96 million, or HK$32,000 per sq ft, by tender.

In other news,the one-month Hong Kong Interbank Offered Rate, which is linked to the mortgage rate, fell to 1.89071 percent yesterday, the lowest in a month. John Tan, regional head of financial markets at Standard Chartered Bank, expects the Hibor to go down after the Lunar New Year and once the current IPO frenzy eases.