Hong Kong-based real-estate and aviation group Swire Pacific Ltd. has been cutting some rents in the city, where months of violent protests choked off business for retailers and tourism operators.
Swire’s Pacific Place mall has shops with brands including Cartier and Louis Vuitton, though its location has at times made it a refuge for protesters fleeing police tear gas and rubber bullets. Rent concessions have been offered to the company’s tenants on a case-by-case basis, Michelle Low, the conglomerate’s finance director, said in a briefing with analysts Friday. She didn’t give the size of rent reductions or name any recipients.
“All of us are aware that Hong Kong’s retail sales have dropped quite significantly,” Low said. “It’s important that we continue to support Hong Kong’s retail industry as well as our tenants through this challenging time.”
Swire, which also controls Cathay Pacific Airways Ltd., has taken a heavy blow from pro-democracy protests that have continued since June, deterring visitors and turning popular shopping districts into battle zones between police and demonstrators. Marches prompted by a proposed extradition law have broadened into a movement against China’s grip on the city, while Beijing has sought to shift anger toward some of the city’s richest landlords for keeping housing prices high.
Sales slumped as much as 12% at Swire’s shopping malls in Hong Kong through the first three quarters. Low said the full-year result would be worse.
The hotel business also suffered, said Low, with an occupancy rate of between 50% and 60%.
International brands have also been scaling back in Hong Kong since the protests began in June. Luxury brand Folli Follie closed one of its shops in Central in December ahead of the lease’s expiration. LVMH, the world’s largest luxury conglomerate, plans to close a Times Square mall store in Causeway Bay after its request for lower rent was refused, the South China Morning Post reported, citing sources it didn’t identify. Shirley Zhao, Bloomberg
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