Hong Kong property developer New World Development says it will cut rents to retail tenants suffering from a downturn in sales.
Chairman Henry Cheng Kar-shun says whether rents will be reduced, and if so by how much, will be decided on a case by case basis in discussions with tenants.
Retailers in the watches, jewellery and luxury goods categories have suffered sales falls as high as 30 per cent in the last nine to 12 months as cashed up Chinese Mainland tourists head to Japan, South Korea or Europe to shop instead of traditionally crossing the border into Hong Kong.
Analysts say any rental reductions by New World are unlikely to affect the company’s profitability as retail accounts for only five per cent of its turnover.
In the half year to December 31, New World’s rental income rose three per cent year on year to HK$720 million – a figure combining office properties and malls.