Sluggish retail rents to spill over to 2020

Visitor arrivals were down by 51.5% in December.

The downward trend in retail rents is likely to continue in 2020, following the 23.6% drop seen in November, according to a Knight Frank report. 

It is also projected that store closures will persist as brands are forced to streamline the number of outlets due to sluggish sales. Prime street shop rents will likely demonstrate a 15% slide in 2020, similar to that of the decline in 2010 and 2011.

Months of social unrest and subdued economic conditions continue to severely impact consumption sentiment and spending by Mainland visitors, noted the report.
Total visitor arrivals plunged 51.5% YoY in December, whilst arrivals from the Mainland declined 53.2%. The slump was close to that during the SARS period in 2003, when arrivals fell more than 60%.

Meanwhile, regional malls are seeing a downturn in foot traffic in comparison to community malls. Regional mall operators will be looking at new ways to beat the decline, including tapping the local consumer market and targeting the residents of nearby neighbourhoods to boost traffic and sales, said the report.