Renewing the lease for its Queen’s Road shop in Central, fashion brand Topshop Hong Kong has halved the rent.
It now has a rate of HK$1.5 million (US$192,000) a month for its 12,000sqft (1100sqm) store on one of Hong Kong’s busiest shopping streets, reports Asia real-estate intelligence group Mingtiandi.
The new deal gives the UK-based retailer of youth-oriented apparel and accessories another three years in the podium of the Asia Standard Tower for around $125 a square foot per month. Topshop had balked at the $3 million it had been paying for the space since signing its previous lease in 2013, the Hong Kong Economic Times reports.
The cut-rate deal is the latest sign of an adjustment in Hong Kong’s retail real-estate scene as landlords scramble to deal with fashion brands and luxury retailers scaling back their footprints in the face of declining sales and recalibrated expectations, says Mingtiandi.
It represents a return to leasing rates seen before a surge of demand from fashion brands prompted a rents rise several years ago. Topshop moved into its Queen’s Road space in 2013 after agreeing to double the amount former tenant Chinese Arts and Crafts had been paying for the street corner.
Swatch last month took over two underground shops in the Central Building on Pedder Street for about $350 a square foot per month, after Hugo Boss moved out midway through its lease. Signing its lease in 2014, Hugo Boss had been paying more than double the rate that Swatch negotiated.
At the end of its lease, jewellery retailer Chow Tai Fook walked away from the underground shop for which it had been paying $3 million a month in Nathan Road, Mongkok. The landlord has been looking for a tenant to take over the space at $1.5 million a month, says Mingtiandi.
In Causeway Bay, Prince Jewellery and Watch is reported to have renewed its lease of a six-storey, 7300sqft shop on Russell Street for $1.8 million a month, about 38 per cent less than it had been paying since 2013.