A flurry of international brands and retailers have left Russell Street in Causeway Bay, with more than 10 shops put up for rent, the largest number of vacancies since the SARS crisis almost two decades ago, said an industry insider.
In the midst of the city's fast-spreading fifth coronavirus wave, Hong Kong delayed the reopening of its border with the mainland, which resulted in a drop in consumption of luxury goods.
Rents are expected to be cut by 40 percent due to the long wait for tenants.
At Soundwill Plaza on Russell Street, leases for two large shops - the 5,200-square-foot shop of British luxury brand Burberry that is fetching around HK$2 million in rent and Swiss luxury clock manufacturer Audemars Piguet's 900-square-ft rent at HK$1.1 million - are about to expire.
The two luxury brands have decided not to renew the leases with the owner intent on getting the same rents for them.
Some agents indicate that the owner welcomes bids from prospective tenants.Soundwill (0878) declined to comment. Burberry first rented the premise 10 years ago at HK$7.7 million per month, 2.5 times higher than its previous tenant.
And in 2015, Burberry's rent surged to HK$8.8 million, which was regarded as the prime time of the street for rent.
The latest reports say the shop that housed Burberry was rented to a sportswear brand for its first year at a monthly rent of HK$1.2 million, or HK$230 per sq meter, a 40 percent price drop. It also marked the first time a sports brand was launched on Russell Street.
The rent harks back to levels around 2004.
An agent expects more brands to launch on Russell Street.
Once a street full of luxury brands, it will see more common brands launch soon, the agent added.
The last deal on Russell Street was in July 2018, a shop rented by Puyi Optical at HK$1.3 million, measuring 1,148 sq m. But now a combined space of 5,200 sq ft can be rented at the same price.
A surveyor said that some shop owners preferred to rent for a short time while waiting for the reopening of the border with the mainland, with great attention paid to 22-24 Russell Street.
Before the Lunar New Year, its proprietor, Emperor Entertainment Group, loaned the premises to the wedding-couture brand Sennet Freres, but the brand has now left due to the crippling outbreak.
The street saw an increasing number of short-term tenants, including fashion brands, mask shops and even lai-see packet shops, and are looking for the next tenant.
Luxury watch manufacturer Rolex left its shop on 8 Russell Street after the termination of its contract in September 2020.
The premises was later rented by European clothing and fashion accessories brand Brandy Melville at around HK$600,000, or HK$75.20 per sq ft, an 82 percent slump from the previous level.
A dearth of international-brand tenants has resulted in landlords accepting much lower rents on Russell Street. Sing Tao
