【1997】Kowloon Development's Ng Tin-hai: First quarter shopping mall performance outperformed Hong Kong's overall market; Harbour City is "especially outstanding"; the local retail market has shifted trend

Wharf Real Estate Investment Company (01997)
Chairman Peter Wu Tien-hai stated that its major shopping malls performed well in the first quarter, outperforming the Hong Kong market, with Harbour City in Tsim Sha Tsui performing “especially outstanding.” Based on preliminary data during the “May Day holiday,” the retail market in Hong Kong may be starting to turn around.

He revealed that during the holiday period, some tenants experienced “exaggerated” business growth, mainly involving high-end consumption sectors such as jewelry stores. Although there are still uncertainties in the market, including ongoing Middle Eastern conflicts and the tug-of-war between China and the U.S., the market has been weak for several years. Coupled with recent positive retail performance, if good news emerges after the summit between the Chinese and U.S. presidents this week, some tenants are expected to adopt a more proactive attitude, whether it’s signing new leases or paying higher rent, with hopes that retail rents can rebound once the market stabilizes.

As for the more competitive Causeway Bay area, Wu Tien-hai pointed out that Times Square is the center of Causeway Bay, “No matter what, the most congested place in Causeway Bay is Times Square, and the busiest parking lot in Causeway Bay is also Times Square. The only cross-border bus station in Causeway Bay is located at Times Square,” tenants need to attract consumers to shop, and the group will continue to cooperate with tenants.

“During the May Day holiday,” hotel room rents in Central and Tsim Sha Tsui increased by single digits year-on-year

The May Day holiday also boosted the hotel business. He mentioned that during the holiday period, hotels owned by the group in Central and Tsim Sha Tsui recorded high occupancy rates, and rents increased by single digits year-on-year, with further potential for growth. As for the reconstruction plan of Marco Polo Hongkong Hotel, there is no news to disclose at this time.

Regarding office buildings, Wu Tien-hai admitted that Hong Kong’s office space still faces oversupply, especially in Eastern Hong Kong Island, Kowloon East, and Kowloon West. However, he noted that leasing activity by financial institutions has become more active, such as foreign banks establishing offices in Central, which makes the demand for office leasing in the area more tangible. Additionally, Tsim Sha Tsui is a hotspot for mainland Chinese visitors, and in the past two years, tenants in insurance, finance, banking, and private wealth management have increased their leased space in Harbour City’s office buildings.