HK shop rents seen falling on tighter wallets

Hong Kong

SHOP rents in Hong Kong are set for their worst year since the global financial crisis as mainland Chinese visitors spend less amid a slowing economy and the nation's anti- extravagance drive. Retail rents in the city were the world's most expensive for two years until they were topped by New York's Fifth Avenue this year. Leases on main shopping streets are set for their weakest growth since 2009, and could drop as much as 5 per cent in 2015, according to Jones Lang LaSalle Inc.

"What's happening now is that demand drivers are slowing," said Denis Ma, head of Hong Kong research at the Chicago-based realtor, who expects growth in street-level rents to be little changed this year. With rents at such high levels, "a lot of retailers are taking a step back and having a look at the market", Mr Ma said.