Higher vacancy rates in prime retail sites in Hong Kong are expected after the Chinese New Year holidays, reports property consultancy DTZ.

This could potentially lead to a 5 to 10 per cent drop in rental rates in the first half of this year, whereas rents are likely to rise for prime office space in the Central district.

Vacancy rates of prime storefronts in the city’s four major districts – Causeway Bay, Tsim Sha Tsui, Central and Mongkok – are in the 2.4 to 6.8 per cent range, says DTZ Hong Kong head of business space Kevin Lam.

He has told the Hong Kong Economic Journal that many short-term tenants will move out after the Chinese New Year.