- Mall’s owner says it will need to repair glass entrances, glass curtain walls, escalators, lifts, and glass balustrades that were vandalised
- The closure will mean even less earnings to businesses which are already struggling from a decline in tourist arrivals and a weak consumer sentiment
Hong Kong's upmarket mall Festival Walk will remain closed until the first quarter of next year, leaving branches of big retail and catering brands to suffer revenue losses in the peak festive period of Christmas and New Year.
Singapore-listed Mapletree North Asia Commercial Trust has announced details on the reopening of its severely damaged Kowloon Tong shopping mall, weeks after protesters vandalised its multiple floors and also set a large artificial Christmas tree on fire.
The mall's owner said it would need to repair glass entrances, glass curtain walls, escalators, lifts, and glass balustrades along the common areas.
"We are working closely with our consultants and contractors to reopen, either partially or fully, in the first quarter of 2020," the trust's manager said in a statement released on Wednesday.
The manager said the reopening would also be subject to approvals to be obtained from the authorities, while adding it would waive rents from retail tenants during the closure.
"While the loss of retail and office revenue, as well as the damage to the property, are covered under insurance policies, the assessment of the quantum of revenue loss and property damage recoverable by insurance claims is currently underway," the statement read.
Singapore investor first to bear the brunt of Hong Kong's protests as vandals laid waste to Festival Walk
The mall is owned partially by Temasek Holdings, Singapore's sovereign investment fund.
During the six-month period to September 30, tenant sales at Festival Walk stood at HK$2.4 billion, the trust revealed to the Post last month.
Hong Kong has been rocked by almost six months of social unrest arising from the now-withdrawn extradition bill.
Violence hit the mall on November 12 when black-clad radical protesters broke glass and railings on several floors of Festival Walk, with some hurling a petrol bomb at its signature Christmas Tree that went up in flames.
The vandalism forced the 1.2 million-square foot shopping-and-office complex to close on November 13. The office tower was resumed on November 26. The rents of the office tenants were waived for the period of the closure.
Business at the shopping centre, which has more than 200 retail stores and restaurants, has grounded to a halt since November 13. Festival Grand cinema at the mall is also closed.
Many big brands have a branch at the mall, including Apple, fashion chain H&M, Marks & Spencer and Uniqlo, as well as Starbucks Coffee and Venchi.
Hong Kong businesses caught in crossfire of protest crisis
The closure, which could last up to five months, will mean even less earnings to businesses which are already struggling from a sharp decline in tourist arrivals and a weak consumer sentiment under the shadow of the political unrest.
A CEO of a 13-strong restaurant group that runs an eatery in Festival Walk, said anonymously that it had to pay HK$1 million a month in salaries to some 50 staff and as repayment for bank loans.
"Other than the payment, we forgo revenue from this restaurant over the five months of closure," he said.
"We can't just lay off the employees, because we will need them when the restaurant resumes business here. Now, they are either on leave or working at other restaurants of the group."
Simon Wong Kit-lung, the CEO of the listed restaurant firm LH Group, said about 40 employees of his two branches at the Festival Walk had to be relocated to his other eateries.
Wong refused to disclose the actual impact of the mall's closure on his business, but he said many other businesses in the food and beverages sector were not positive about the future outlook.
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