Retail sales, street shop rents in Hong Kong spiral down

Even hotel occupancy rates have been sinking.

It has been noted that uncertainty continues to cloud the retail market in Hong Kong and this has been reflected in a number of key indicators.

According to a research note from Savills, retail sales, hotel occupancy rates, RevPAR and street shop rents are all down, providing clear evidence of the current malaise.

Reasons for the downturn are not too hard to find, the report noted. Slowing growth in China where GDP has fallen from 7.3% in Q4/2014 to 7.0% in Q1/2015, anti-corruption measures which have seen (by some accounts) over 200,000 corrupt offi cials arrested, dismissed or set aside over the past 3 years.

Here's more from Savills:

Further, the recent stock market slide which saw the Shanghai Composite lose over 30% of its value between late June and early July. Lastly, a relatively stronger US Dollar/Hong Kong Dollar, as well as a stronger RMB is encouraging more mainlanders to look further overseas for bargains.

As the government continues to support the PRC equity markets, the possibility of further declines if measures are relaxed or removed is beginning to give rise to more general business and investor uncertainty.

Local spending by mainland tourists, for so long a given, suddenly seems less robust, particularly the discretionary spending of the wealthy who are more likely to have been affected by margin calls in the stock market or corruption campaigns.