Hysan Development ready to seize opportunities in luxury market
Developer targets high-end tenants seeking to consolidate their store networks amid slowdown
Hysan Development, the largest landlord in Causeway Bay, believes it can seize the opportunities from the consolidation of store networks undertaken by luxury brands as a slowdown in retail sales gathers pace.
Deputy chairman Lau Siu-chuen, who raised eyebrows two years ago with his forecast of slowing sales in a sector propelled to double-digit growth rates by mainland tourists, said Hysan was keen to lure high-end tenants on the lookout for locations that offered better value.
Despite the accuracy of his call on the retail slowdown, Lau said the outlook for the sector was "not pessimistic".
"Retail sales are largely dependent on economic growth and the wealth effect of the property market. The improvement in the United States and the mainland Chinese economies will have a positive impact on Hong Kong," he said. "Now we have seen Hong Kong property prices have actually hit a record."
The gains in the property market would have a balancing effect on retail sales. Lau said: "I don't think retail sales will see negative growth this year."
Earlier this year, Hysan forecast retail sales would grow 4 to 5 per cent this year.
Lau believes many retailers had expanded too aggressively over the past decade, with "business models based on compound growth of 20 to 30 per cent a year".
