Property company Savills says the number of retail lease surrenders is on the rise in Hong Kong.
And there is more vacant retail stock  in first tier streets and secondary locations.
That is part of the reason for a 5.5 per cent decline in average prime retail rents in the June quarter compared to the March quarter.
But more ominously, prime retail rents have fallen 19.5 per cent year on year, according to Savills’ research.
On the positive side, shopping mall rents continue to resist the general trend, remaining steady in the second quarter, rising by 0.2 per cent quarter on quarter and by 3.5 per cent year on year.
“While mall owners continue to innovate to stay ahead, more marked changes have taken place on the high street where the emphasis is shifting away from watches and jewellery and luxury fashions and towards more mass to mid-market brands with lower rental affordability,” said Savills in its quarterly report Hong Kong Retail, downloadable online.
“In this respect, major rental adjustments have been noted in both Central and Causeway Bay. In some rare positive news, we note that strong domestic consumption means that food & beverage remains relatively more resilient than other trades and suburban malls continue to be well supported by local consumers.”
Savills attributes the high street problems to slowing economic growth and anti-corruption measures in Mainland China, the recent stock market slide and a relatively stronger Hong Kong Dollar.