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Hong Kong retailers seek steep rent cuts as closures continue
Tenants are pressing for 20% to 50% reductions, while landlords are offering mostly 10% to 20% cuts despite some sites raising rents.
Retail sales in Hong Kong grew more than 10% year on year in the first five months of 2026, but a continuing wave of shop closures is widening the gap between tenants and landlords over retail leasing terms, according to SCMP Economy.
Tenants say their businesses remain stuck as they compete through frequent discounting to attract customers, blaming the broader economic climate. Many are hoping for rent reductions of 20% to 50% to ease losses.
Landlords, however, view the retail market as recovering and are willing to cut rents only in the range of 10% to 20%, with some shopping-centre locations even raising rents. Michael Leung, chairman of the Association for Hong Kong Catering Services Management and owner of several restaurants, described the operating environment as poor and said the catering industry is harmed by cutthroat price wars and holiday travel to the mainland, noting more than 500,000 people leave during long breaks.
Leung said total monthly expenditures for his five restaurants, including rent, air-conditioning charges, and management fees, total HK$1.6 million, about 20% of total expenses, and he believes a 20% to 30% rent reduction is needed for survival. The report also cited German Pool founder Edward Chan, who said online sales have hurt brick-and-mortar stores and that he was still negotiating rent reductions.