請更新您的瀏覽器

您使用的瀏覽器版本較舊,已不再受支援。建議您更新瀏覽器版本,以獲得最佳使用體驗。

Eng

Hong Kong’s retail sales could sink up to 50 per cent as city shuts out Chinese visitors amid coronavirus outbreak

South China Morning Post

發布於 2020年02月19日04:02 • Lam Ka-sing kasing.lam@scmp.com
  • Keith Wu Shiu-kee, CEO of Sunlight Real Estate Investment Trust, says the impact of the outbreak on retail sales would be far worse than during the protests
  • Sunlight’s Sheung Shui Centre Shopping Arcade, close to the Lo Wu and Lok Ma Chau border crossing near Shenzhen, has been hit the hardest
Most border crossings with mainland China, including the Lo Wu Control Point (above), are closed to contain the spread of the Covid-19 outbreak that has infected more than 72,000 people in China and claimed over 1,860 lives. Photo: Edmond So
Most border crossings with mainland China, including the Lo Wu Control Point (above), are closed to contain the spread of the Covid-19 outbreak that has infected more than 72,000 people in China and claimed over 1,860 lives. Photo: Edmond So

Retail sales in Hong Kong could plunge by as much as half, as most of the city's borders with China remain shut amid the Covid-19 outbreak and its impact could be more severe on the sector than the months-long social unrest, according to the CEO of Sunlight Real Estate Investment Trust.

"Our estimate is clearly double-digits," said Keith Wu Shiu-kee. "Whether it is 30 per cent, or 40 per cent, or 50 per cent, remains to be seen."

Sunlight, which is managed by a unit of Hong Kong's third largest property company Henderson Land Development, has 11 offices and five retail properties in the city.

Wu said that the impact of the coronavirus outbreak on retail sales would be much more serious and widespread than during the protests, noting that in the second half of 2019 tourists from the mainland were still coming even though the flow had reduced considerably.

Sunlight Reit CEO Keith Wu Shiu-kee says the coronavirus outbreak will hurt the retail sector much more than the protests. Photo: Jonathan Wong
Sunlight Reit CEO Keith Wu Shiu-kee says the coronavirus outbreak will hurt the retail sector much more than the protests. Photo: Jonathan Wong

"During the social unrest period, the disruption was mainly during the weekend. But this time, we're talking about the closure of Hong Kong. That means preventing tourists from entering Hong Kong, particularly from China." He did not say when the sector would return to normal.

Hong Kong closed six borders in late January and four on February 4. The city's government made it mandatory for everyone coming from the mainland to be quarantined for 14 days since February 8 in a bid to contain the outbreak. Only 832 mainlanders arrived in Hong Kong on February 10 as the rule was enforced.

Even before the coronavirus outbreak, Hong Kong reported dwindling tourist numbers because of the protests that started in June. In the first 11 months of 2019, visitor arrivals fell 10 per cent year on year to 53 million, most of whom were from the mainland, according to data from the tourism board.

Sunlight's Sheung Shui Centre Shopping Arcade, which is close to the Lo Wu and Lok Ma Chau border crossing near Shenzhen, has been hit the hardest, as one-third of the visitors to the mall are from China.

Wu said that during the peak of the social unrest in October and November, the drop in footfall to the mall was only about 10 per cent compared to six months earlier. He now expects the fall to be much sharper as there were no Chinese tourists.

"While we haven't seen the numbers, you know you're going to see that retail sales will definitely fall much more sharply compared to the social unrest period."

Hong Kong developers, real estate agencies put on alert as Wuhan virus threatens to inflict more retail losses after protests

Wu also said Hong Kong needs to consider reducing its reliance on mainland tourists and build its manufacturing capability and make itself self-sufficient in certain "daily necessities". He was hinting at the shortage of toilet rolls, tissue paper and masks that the city's residents have been stockpiling amid fears supplies would run out.

Some of the city's major landlords, including Henderson and Sun Hung Kai Properties, have offered to cut rent by up to 60 per cent to help retailers weather the storm and prevent job redundancies. The twin blow of social unrest and the Covid-19 outbreak has seen many retailers such as Sa Sa International announce plans to shut stores.

Hong Kong's economy shrank by 2.9 per cent in the fourth quarter of 2019 for a second consecutive quarter. For the whole of 2019, gross domestic product was expected to shrink by 1.2 per cent in real terms, the first annual decline since 2009.

Stanley Chik, head of research at Bright Smart Securities, does not expect any significant improvement in the retail environment because of the uncertainty over the Covid-19 outbreak and "critical economic environment".

Other analysts such as Raymond Cheng, head of Hong Kong and China research at CGS-CIMB Securities, said landlords with a high emphasis on retail, like Swire Properties, will be hit hard.

"The negative impact of fewer mainland Chinese customers for Pacific Place and the hotels atop the mall could be more severe than we had expected," said Cheng.

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

0 0
reaction icon 0
reaction icon 0
reaction icon 0
reaction icon 0
reaction icon 0
reaction icon 0