Chow Tai Fook wins 40 per cent rent cut
Jeweller Chow Tai Fook has reportedly re-signed a retail shop rental lease at a 40 per cent reduction.
It’s a rent reduction which will energise the retail sector, but not doubt send shivers through Hong Kong’s property community.
Several listed luxury retailers have in recent months been openly discussing expectations of reduced rents when re-negotiating with landlords over lease renewals. Their expectations are grounded in falling sales of luxury goods resulting from Mainland China;s gift-giving crackdown and a reduction in the number of cashed up, big spending Chinese tourists hitting the territory.
But the sort of reductions being discussed have ranged between 10 and 20 per cent.
According to Ming Pao, Chow Tai Fook has renewed the lease on its Mong Kok Bank centre branch – shops 6 and 7, on the ground floor.
The previous rent agreed was $1.3 million in 2012. The new rent rate is 40 per cent lower. Other terms, such as the lease term, have not been disclosed.