The most expensive retail street, Causeway Bay in Hong Kong has recently hit by a reduced footfall. Specially, the number of cash-rich mainland Chinese visitors has showed significant decline. Owing to this, the rents of shops and stores are expected to drop almost 40% in 2015.
Market experts predicted a fall of around 15% in rents this year, but many landlords have decreased the rent by up to 40%. However, many of the retailers think that this reduction in rent might not be sufficient to equalize the declining sales.
Ms. Caroline Mak, member of the Hong Kong Retail Management Association (HRMA), said that many retailers are aiming on enhancing the sales of existing stores, rather than opening new ones. She added that the retail scenario in Hong Kong was weak in the first half of the year and no positive sign can be seen for the latter half of 2015.
Burberry, a U.K.-based luxury goods manufacturer, stated that the sales of its Hong Kong store dropped by a double-digit percentage in the Q1 of the fiscal year 2015-16 closing on June 30. If the decline in the sales continues then the firm might push for decreasing rents at lease renewal time for its 17 stores in Hong Kong.
Some giant retailers such as Giordano International Ltd., a casual wear brand, and Chow Sang Sang Holdings, a jewelry brand, have shut their existing stores and have not opened a new one in 2014 due to the massive decrease in the visits of their key customers.
Causeway Bay has beaten out Fifth Avenue of New York to occupy the tag of priciest retail space of the World.