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HK property developers cut retail rents amid war on virus

Hong Kong

MAJOR shopping mall landlords in Hong Kong are offering cuts of up to 60 per cent in the rent for February to help tenants ride out the effects of the novel coronavirus outbreak.

Hong Kong's retail sector, battered by months of often violent anti-government protests, is likely to suffer in the coming months as the outbreak in mainland China has emptied shopping centres and closed down tourist attractions.

Henderson Land said it will cut February rent by 20 per cent to 60 per cent for its small- to medium-size tenants in retail, food and beverage, as well as education businesses, following similar moves by its peers.

"Hong Kong's retail and food and beverage businesses have been greatly affected since February due to the novel coronavirus outbreak," Henderson Land said in a statement on Thursday.

The city's largest property developer by value, Sun Hung Kai Properties - which owns major district malls hosting international fashion brands ranging from Coach to Zara - has said it will reduce February's rent by 30 per cent to 50 per cent for most of its tenants.

New World Development, whose tenants include many luxury brands, also said it would reduce the February rent, while MTR Corp, which runs malls on top some of its subway stations, said it would adjust rent for small- and medium-sized companies.

It also said it would launch relief measures for its chain and international brand tenants after collecting their sales data.

Link Real Estate Investment Trust has set up a HK$80 million (S$14.3 million) relief scheme for its community malls, including measures like allowing rent payment by instalments, waiving late payment interest and service charges and granting rent-free periods and reducing rents.

Separately, Sun Hung Kai Properties said home sales and hotel occupancy rates have been affected by the epidemic.

Hong Kong's economy contracted for the first time in a decade last year, and the worst yet to come, with no end in sight to the protests in the Chinese-ruled city and the virus outbreak in mainland China.

Hong Kong, which has confirmed 50 novel coronavirus cases and one death so far, has taken measures to reduce the number of visitors from China, although the city's retail and tourism sectors rely heavily on spenders from the Chinese mainland. REUTERS

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