Exco chairman calls for rent cuts in retail to keep companies afloat

The grim scenes at the three locations on Friday were in stark contrast to the newly opened The Southside shopping mall in Wong Chuk Hang, which Ip said was crowded and had queues outside some restaurants.

Ip said the new mall would offer a variety of stores that would attract not only locals but also shoppers from further afield.

“Hong Kong’s economy is in a phase of transformation and the market is inevitably quiet,” she said on her social media page.

“The shopping centers in the southern district are undergoing a ‘major restructuring’ to weed out the weak and retain the strong.

“I hope that the owners of the shopping centers will take the initiative and reduce rents to help retailers get through these difficult times.”

However, Ip added that malls and retailers also need to have the courage to make changes, offer more discounts and organize special activities to increase their appeal and encourage Hong Kongers to stay and spend money in the city.

She said weak sales on the second and third floors of the renovated Aberdeen Market were evident, with almost an entire row of stalls in the third-floor dry goods section closed.

Ip added that other stall owners also reported difficulties.

She said that the overall consumption power in Chi Fu Landmark is only average and there is little foot traffic, but rents are high.

Ip added that many empty shops were also spotted at the Pok Fu Lam shopping mall.

Ip quoted fellow party member Nicole Wong Yu-ching, a southern district councillor, as saying that many people were pessimistic about the mall’s future as long-standing shops had closed and even banks had relocated.

Since the border reopened after the pandemic, businesses and shopping malls have been hit by an exodus of people streaming across the border into mainland China to shop, dine or vacation.

Retail sales fell 9.7 percent year-on-year in June, the fourth consecutive monthly decline.

Officials and industry experts have already called on the sector to adapt and restructure to encourage people to stay and spend their money in the city.

Figures from real estate consultancy JLL Hong Kong show that retail vacancy rates in Central, Causeway Bay, Tsim Sha Tsui and Mong Kok stood at 11.1 percent in the first quarter of 2024.

While this is down from the peak of 18.5 percent in the third quarter of 2022, it is still more than double the 5.2 percent in the second quarter of 2019.