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Mall's tenants win as fiscal crisis hurts

ASSOCIATED International Hotels Ltd is asking for rents at its new mall in Hong Kong's Tsim Sha Tsui neighborhood as much as 30 percent below the mid-2008 peak levels in the district as the recession hurts consumer spending.

Tenants at street level will be charged rents of HK$600 (US$77) to HK$800 per square foot per month, Kevin Lam, associate director of retail services at DTZ, the mall's leasing agent, said yesterday. Shops on other levels will cost between HK$40 and HK$200 a square foot, depending on the size, location and trade, he said.

Hong Kong last year slipped into a recession, its first since 2003, as the global economic downturn cut domestic demand. Retail sales growth slowed in December amid rising unemployment, leading malls to lower rents, according to Bloomberg News.

"Everyone has to cut rents," Nicole Wong, a Hong Kong-based analyst at CLSA Asia-Pacific Markets, said yesterday. "Those without pricing power, such as new malls with no proven record, are under more pressure because they need to fill up."


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