Hong Kong developers slash retail rents by up to 60% amid coronavirus battle

Shoppers at a mall in the Tsim Sha Tsui district of Hong Kong on Feb 11, 2020. The city's retail and tourism sectors rely heavily on spenders from the Chinese mainland. PHOTO: NYTIMES

HONG KONG (REUTERS) - Major shopping mall landlords in Hong Kong are offering cuts in February rent by as much as 60 per cent to help tenants ride out the effects of the 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-sized 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 outbreak of the novel coronavirus outbreak," Henderson Land said in an e-mailed statement on Thursday (Feb 13).

The city's largest property developer by value, Sun Hung Kai Properties, which owns major district malls that host international fashion brands ranging from Coach to Zara , said on Wednesday it would reduce February 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.

MTR 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 million) relief scheme for its community malls, including measures like allowing rent payment by instalments, waiving off late payment interest and service charges, 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 in 2019 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 coronavirus cases and one death so far, has taken measures to reduce the number of visitors from China. The city's retail and tourism sectors rely heavily on spenders from the Chinese mainland.

The Chinese province of Hubei, which is at the epicentre of the virus, reported a record 14,840 new cases on Thursday under a new method for diagnosing cases.

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