Hong Kong underground mall plan revealed  

A Hong Kong underground mall plan touted this week may well be  a solution searching for a problem…
A government pilot study has identified four prime locations in the city which it says could help attract new entrants into the city’s retail market and lower rents by increasing supply.
But the study was conceived in June last year, as Hong Kong’s current retail downturn was taking off in earnest. While it may well be worth considering in very long-term planning, any concept involving building more retail shopping centres in the current economic environment now seems ill-timed at best.
That the concept was flagged as a means of bringing down rents seems ironic in the same week as DTZ/Cushman Wakefield released its annual review of the most expensive retail rents internationally, which found while Causeway bay still tops the list in Asia – and is second globally only to Upper Fifth Avenue in Hong Kong, rents there fell 17 per cent year-on-year. Furthermore, there is an extensive list of empty retail sites across not just Causeway Bay but Hong Kong in general – in malls and on high street locations. More stores still are tenanted by short-term pop-up concepts.
The concept was revealed by secretary for development Paul Chan Mo-po in his blog. He said a pilot study was looking into the potential development of underground spaces in Tsim Sha Tsui West, Causeway Bay, Happy Valley, Admiralty and Wan Chai.
Underground malls have been tried and failed before, the most recent and largest being the 150,000 sqft Palace Mall at Tsim Sha Tsui which failed because it lacked a connection to an MTR station.
“Only a few shoppers were willing to visit the Palace Mall even though it was in Tsim Sha Tsui,” Helen Mak, head of retail service at Knight Frank, told the South China Morning Post this week.
“An isolated underground retail mall will be unlikely to succeed.”
Globally, underground malls are a magnet to consumers and commuters escaping extreme weather elements. They are hugely successful in Toronto, Canada, in some Japanese cities like Sapporo and in Scandinavia. But attracting people underground is a major challenge if there is no other purpose to go there – such as transportation – or to escape weather.
Terence Chan, head of retail at JLL, was more optimistic about the concept: “Location, location and location is the main concern for retailers. The government’s study could boost the development of the retail and tourism industry,” he said, arguing underground space could be cheaper than high-street locations.

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