Sunlight returns to retail

Chief executive of Sunlight Real Estate Investment Trust (0435) Keith Wu Shiu- kee said the volatile period in the retail market at the start of the year has passed.

Wu said though the local retail market was not performing well over the past two to three years but its impact on rents for shops in shopping malls was limited. He pointed out that rents for shops extending their rental contract in the REIT’s shopping malls went up 6.5 percent during the three months ended September 30. A slowdown in the retail market had not affected shops selling daily necessities, he said. He expected the retail market to continue to improve next year. Commenting on increasing demand for Hong Kong’s office spaces from mainland companies, Wu said it might increase the cost for purchasing offices.

Meanwhile, he said the revamp of Sheung Shui Centre is nearing completion but admitted that the occupancies was not 100 percent.

Retail spaces occupied by food and beverages shops in the mall has gone down following revamp, he said, but rents from the food and beverages shops have gone up by a double digit. Seperately, Lifestyle International (1212) said the total investment cost for its Kai Tak commercial project is expected to be about HK$13 billion.

Lifestyle, operator of Sogo department store, acquired the first commercial site in Kai Tak development zone in November for HK$7.39 billion.

The company said it intend to develop the site into two blocks of commercial buildings to provide spaces for both retailing and office use.

Lifestyle planned to house a department store and other facilities which are complementary to the department store operations in the retailing portion, while the office space will be held partly for self-use and partly for leasing out.

It expected the development to be completed before 2022.