Agency closing branches hurts the shop market
2022-12-3
Stepping into December, Hang Seng index has been rising and the market sentiment is also improving. In property market, shop owners suffered the loss which was much more than the residential proprietor. Until recently, one leading property agency firm declared to cut their branches massively. As a result, it will give a hard hit to the retail & grocery store market which the general investor perceives that is a sound investment.
Residential and retail & grocery store market are positive corelated each other. The market welcomes the reduced-price premises, and the purchasing power is strong. Retail & grocery store market is as the same of residential market. The lowered price of this premises is also having a strong demand from the investors and tenants. Unfortunately, the downturn of the residential market starts to have negative effective to the property agency firm. In consequence, the property agency firms confront a massive loss due the diminished amount of the transaction.
According to the current situation, the amount of transaction will not rise significantly again even the price has fallen to the trench. It is pity to the property industry because they depend on the commission which it derives from the transaction volume. Facing to the reality, this industry must cut half of their branches for self-help in brief period. This industry has rent hundreds of shops in the less prestigious arcade in residential districts. Finally, their branches’ relocation will cause an intense pressure to the overall retail & grocery store market.
One principal property agency firm has declared that they prefer not to review the leasing contracts upon expiry. Unless the property owner cut the new contract’s rental by thirty cent or more. The market observers estimate that the whole industry will cut three or four hundred shops in the coming year. In general, this industry has rent forty cent or more of the leasing shops in tier two or three shopping center. Finally, it will trigger higher vacancy rate which will push down the purchasing price and the leasing rental.
The prime shop market confronted the first strike when mainland closed the border crossing two years ago. Nowadays, the retail & grocery store market also cannot avoid consistent punching from the economic downturn. The higher vacancy rate pushes down the purchasing price and rental. In the coming year, the market performance may get even worse than this year.
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