Landlords of street level shops in prime locations in Hong Kong are slashing rents significantly in a bid to woo retailers whose business is suffering from dwindling tourist traffic, signalling that the market correction is not yet over.

Some shops in the retail complex Laforet in Causeway Bay are reportedly being offered for lease at rents that are up to 78 per cent lower than the previous lease prices.

In one case, a 458 square foot ground level shop in Laforet was leased for HK$120,000 a month on a short term lease, down from the pervious lease of HK$550,000.

“Some retailers selling jewellery and watches have been forced to downsize their operations in response to fewer tourists visiting Hong Kong,” said Terence Chan, head of retail at JLL.

Adding fuel to the fire, the ongoing slump in mainlander spending would also hurt sales of luxury retailers, he said.

From January to April visitor arrivals fell 8.8 per cent to 18.42 million from a year ago, according to data from the Hong Kong Tourism Board. Mainland tourist numbers fell 12.6 per cent to 13.88 million during the period.

Chan said the average spending for tourists has slumped to HK$2,000 a day, from the previous HK$6,000.

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