Some Hong Kong retail landlords and hotel owners are seeking to convert their properties into restaurants and housing to counter rising store closures and lower occupancy rates, as the two-year tourism slump shows no signs of ending.
The owners of Park Lane Shopper’s Boulevard on Nathan Road in Tsim Sha Tsui, one of Hong Kong’s four major tourist belts, last Friday submitted an application to turn the 300-metre long, 50-store complex along the boulevard into a food and beverage destination.
The proposed change will replace the retail stores with cafeterias, coffee shops and tea houses on the ground and first floors of the landmark shopping destination for tourists and locals since 1986.
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The retailers are seeking a change “as a market response to the structural shifts in the socio-economic context of Tsim Sha Tsui and wider Hong Kong in recent years, especially amid a decline in tourists, which has resulted in store closures and affected the urban dynamics in the area”, the Incorporated Owners Park Lane Shopper’s Boulevard, which represents the landlords, said in their application to the Town Planning Board (TPB).
The proposed uses are “critical for adding flexibility and resilience to the local economy in responding to the recent changes”, the application said.
Hong Kong’s strict travel curbs have brought the city’s tourism industry to a standstill since the coronavirus pandemic started more than two years ago. Tourist arrivals plunged 94 per cent from 43.8 million in 2019 to 2.7 million in 2020, and fell by another 98 per cent to 65,721 in 2021, according to data from the Hong Kong Tourism Board.
“The proposed change reflects the prevailing retail market demand,” said Cynthia Ng, executive director retail services at Colliers. “Even after the reopening of the border, the food and beverage sector will continue to be a sustainable trade, and modern dining concepts will do well in Hong Kong.”
CBRE also expects food and beverage outlets to attract more local customers and draw more footfall to the area.
“If the food and beverage options are of high quality and coupled with the boulevard’s trees and ambience, similar to the Champs-Élysées in Paris, it can also attract overseas tourists with its vibe,” said Lawrence Wan, senior director of advisory and transaction services for retail at CBRE Hong Kong.
Meanwhile, the slackening demand for hotels is prompting developers to convert their hotels into residential use.
Last Thursday, Sun Hung Kai Properties (SHKP) became the latest builder to secure approval from the Town Planning Board to convert a hotel – its waterfront Royal View Hotel in Ting Kau, Tsuen Wan West – into a residential project.
The proposed changes will see the 15-storey building converted into 661 flats of varying sizes and will include a day care centre for the elderly with 60 places, according to the document from the planning authority.
It said the existing building will remain unchanged as “only minor addition and alteration work would be required [and] housing units could be delivered within a short period of time”.
SHKP’s proposal comes after CK Asset Holdings secured approval from the planning board to convert two hotels for residential use over the past 18 months.
CK Asset, the flagship company of retired tycoon Li Ka-shing, received permission in December 2020 to convert its 1,100-room Harbour Plaza Resort City in Tin Shui Wai into a 5,000-unit housing project. And in February last year, it received the green light to convert its 800-room Horizon Suites in Ma On Shan into a residential development with up to 758 flats.
“The proposed conversion makes sense as the full recovery of the city’s tourism industry is still far from certain,” said Vincent Cheung, managing director of Vincorn Consulting and Appraisal.
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