Pleas for Rent Breaks Fall on Deaf Ears

One commuter suited up in hat, visor and mask on the MTR

In the last few days, it looks like there are more people are on the streets in Hong Kong, taking public transit, albeit with masks and the odd one wearing goggles and surgical gloves.

This evening I went to try a new restaurant in Sheung Wan and was shocked to see it completely packed with diners. It was as if the virus didn't even exist in this place.

Everyone wears masks while taking public transport

But for many other restaurants, they are hurting badly, thanks to eight months of anti-government protests and right after the coronavirus hit.

A restaurateur who owns a few places around town is looking glum. The other day we were in his newest restaurant that opened late last year and at lunchtime it's not packed, but it's a decent stream of business as well as takeout orders.

But it's not enough to cover the rent.

He says shopping mall landlords hardly budge at all when it comes to rent concessions. He heard some shop owners have banded together in the hopes that as a consortium they can have more leverage in dealing with the landlord, a massive conglomerate. Wonder how that is going.

Another entrepreneur with trending food brands in his portfolio, has decided not to renew leases with those shopping malls that have not offered any discounts on rent, and will boycott them. But will the landlord even care?

Many prefer to dine at home than eat out for dinner these days

One of the big landlords is Wharf Real Estate Investment Company (Wharf REIC), that owns Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay, says the outlook for the city's economy was "pathetic" and "dire" in the near term.

"We feel Hong Kong is pathetic in the short term. It could take three months, six months or even nine months [for the COVID-19 outbreak to subside and the city's economy to bottom out], but we have no idea," Stephen Ng, the company's chairman and managing director said today during the annual results briefing.

"However in the long run, we believe Hong Kong is still a lovely place to do business. As long as we can walk through the current [crisis], it will be better."

Interesting he chose the word "lovely". I wouldn't describe Hong Kong as a "lovely place to do business", but Ng has said so.

Times Square shopping mall in Causeway Bay is empty

Maybe it's because he feels his company has the upper hand when dealing with their thousands of tenants who are all begging for some kind of rent concession?

But these tenants are literally going to go out of business or cut their losses short and close in the next few months if the coronavirus does not let up soon. Case in point: today I saw on Twitter that the University of Hong Kong will continue classes online until May 16! It is possible schools could be closed till May as well.

So... for the sake of keeping the Hong Kong economy somewhat alive, the city's big shot landlords should stop obsessing about their company's stock performance and consider giving their tenants a break in the rent. Isn't it better to have shop spaces occupied than vacant? An empty shopping mall is hardly appealing to customers...