Sun Hung Kai Properties, Hong Kong’s biggest developer by market value, Lan Kwai Fong Group, the biggest bar and restaurants landlord in the city’s Central district, as well as New World Development have cut rents in response to a call by Paul Chan Mo-po asking for property owners to “fulfil their social responsibilities”.
Sun Hung Kai said it would cut base rents at its shopping centres by up to 50 per cent in February, as an outbreak of Covid-19, the newly named disease caused by the coronavirus, continues to weigh on a range of industries in the city.
The developer said it hoped the relief measures would stabilise the economy and protect employment. “The group is particularly concerned about the catering industry, which employs a large number of frontline employees, and hopes that the relief measures will help reduce their operating pressure,” it said in a statement.
The relief measures come in response to a call by Chan, Hong Kong’s Financial Secretary, who called on mall owners to cut rents in a blog post on Sunday. “I reiterate my appeal to property owners to tide over difficult times together and fulfil their social responsibilities by providing more substantial rent reductions for tenants whose business is in distress,” he said in his post.
It is common practice in Hong Kong for shopping centre operators to charge a base rent that becomes the turnover rent if sales exceed an agreed threshold. SHKP owns 12 million sq ft of retail space across 24 shopping malls in the city, including the IFC Mall in Central, New Town Plaza in Sha Tin and Yoho Mall in Yuen Long.