Hong Kong Economic News

[Behappyalways]

Hong Kong hoteliers say market’s a ‘disaster’ as 90 per cent of rooms stay vacant amid viral outbreak
https://www.scmp.com/business/article/30...acant-amid

[Behappyalways]

Coronavirus: Hong Kong expert claims outbreak is now a pandemic and US death could be ‘tip of the iceberg’
https://www.scmp.com/news/hong-kong/heal...isease-now

[soros]

Replying to what is in scmp.com report ( in post 2) ,

Asked if the virus, which causes the Covid-19 disease was now a global pandemic, Leung said the only reason for not classifying it as such was maybe the word “triggers public fear”.

“Technically this is a pandemic, as it is spreading locally in many countries … but the World Health Organisation insisted that it should only be called pandemic when local outbreaks get out of control,” he said.

It seems that BlueKelah's recent pandemic forecast posted in the "china economic news" thread is now coming true.

[weijian]

LVMH is shifting out of Hong Kong as luxury shoppers stay home

For LVMH, which owns brands including Louis Vuitton, Christian Dior and Tiffany & Co., the post-COVID recovery has been much slower in Hong Kong than elsewhere in Greater China, according to one of the people.

The company expects the pivot by Chinese shoppers to buying more domestically to continue, with the portion of total luxury spending that’s done within the mainland expected to almost double from pre-COVID levels, one of the people said.

https://english.alarabiya.net/business/e...-stay-home

[weijian]

It would be hard to battle value-for-money for those catering to the mass market. I reckon only those are selling unique experiences and products will be relatively immune.

No wonder Shenzhen is drawing diners and shoppers from Hong Kong – it is close by, clean and food is much cheaper

Earlier in the day, our noodle set lunches in a mall food court cost between 25 and 30 yuan. In Hong Kong’s Central neighbourhood, that’s the typical price of a lemon tea.

In Hong Kong, that meal would have cost HK$1,000 (US$130). The bill in Shenzhen was just over 400 yuan (HK$440).

https://www.scmp.com/lifestyle/food-drin...ch-cheaper

[specuvestor]

I don't buy the idea that it's because Shenzhen food is cheaper cause that was the case pre COVID as well... Something else changed

After speaking to some HKers my sense is:

1) HK economy is slowing down and difficult so people don't mind spend more time to hunt for value
2) Transportation is easier... not sure if the HK-Macau-Zhuhai bridge contributes but the new malls around the Shenzhen train stations helped. It's like less than 30min from New Territories and out to Shenzhen malls, including "custom gates".
3) The standard of living in Shenzhen has improved substantially that it doesn't feel like a downgrade. And the service is amazingly better and more polite than HK

My interest in HK-Shenzhen is actually more nuanced towards what's going to happen to SG-Johor when the RTS opens late next year. Something to ponder about.

[EnSabahNur]

This is grim reading

https://on.ft.com/4dsBoKj

The painful slump in Hong Kong property

Quote

According to Cushman & Wakefield, prime office rents across Hong Kong have dropped by nearly 40 per cent from their peak in 2019, and government figures show vacancy rates at a record high of 16 per cent. Against this unpromising backdrop C&W predicts roughly 6.7mn sq ft of new office space — 14 times The Henderson’s gross floor area — will be released to the market over the next five years. 

The city’s prime office rental market “hasn’t bottomed out”, says Fiona Ngan, head of occupier services at Colliers Hong Kong. “Many multinational companies are downsizing, driven by a weak economy . . . and mainland Chinese companies are not coming in at the [quick pace] as previously expected due to budget limitations.” 

It is a similar story in the residential market. Government data shows the number of completed but unsold units has risen 134 per cent from 2018 and prices have fallen about a quarter from their peak in 2021. Last year, the price of the median property in Singapore outstripped that of Hong Kong.

Real estate still matters greatly in Hong Kong. It is how many of the territory’s high-profile business families built their fortunes. The benchmark Hang Seng stock index contains 12 property or construction groups and regular auctions of government-owned land for development raise significant sums for the territory’s administrators.