Hong Kong retailers in rent battle to survive virus, protests blow
Retailers in Hong Kong have launched themselves into a rare battle with the city’s notoriously unflinching landlords for deeper and longer-term rental cuts, as they reel from the double whammy of the coronavirus epidemic and months of political unrest.
Hong Kong’s economy contracted for the first time in a decade in 2019 after anti-government protests scared tourists away and emptied shops and restaurants. Now, many retailers fear the coronavirus crisis is threatening their survival.
Last week, around 50 brands took part in an unprecedented strike, shutting 200 shops across prime shopping malls for a day to demand their landlords reduce rent. Now they’re staging a second strike.
The striking retailers want base rent to be waived and only turnover rent to be charged, as foot traffic has dropped dramatically in recent weeks. Commercial leases vary across sectors and locations but these retailers are mostly on terms that pay either base rent or a percentage of turnover.
Mall landlords — major property developers, such as Henderson Land and Sun Hung Kai Properties — have slashed February base rents and some have extended the cuts to March. But retailers say this is still too much to bear.
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