Retail / news
Hong Kong Shops, Landlords at Odds Over Rent as Sales Rise
Hong Kong retail sales rose over 10% year-on-year in early 2026, but a wave of shop closures persists, creating a rift between tenants seeking significant rent relief and landlords who see a recovering market.
Retail tenants in Hong Kong are pressing for rent reductions of 20% to 50%, arguing that their businesses remain stagnant despite a headline increase in sales. They cite constant price cutting to attract customers and a broader economic malaise that leaves streets empty by 8pm.
Landlords, however, view the market as improving and are offering only limited cuts, typically between 10% and 20%. In some locations, including certain shopping centres, they are even increasing rents.
Michael Leung, chairman of the Association for Hong Kong Catering Services Management and owner of five restaurants, described the operating environment as 'poor'. He noted that over 500,000 residents leave Hong Kong for mainland China during long holidays, severely hurting the catering industry.
Leung’s monthly expenses for his five restaurants, including rent, air-conditioning charges and management fees, total HK$1.6 million (US$204,000), accounting for 20% of total costs. He said a 20% to 30% rent reduction is necessary for survival. In October, he closed Lucky Dragon Palace Restaurant, a 45-year-old establishment known as a 'TV Stars’ canteen'.