Kowloon Wharf Group Chairman and Executive Director Ng Tin-hai expressed concerns about the challenges faced by retail and office businesses last year. According to RTHK, Ng noted that the retail market has shown promising growth at the beginning of this year, with January witnessing a significant increase, particularly due to the Lunar New Year. If this positive trend continues, Ng remains optimistic about retail sales for the year. However, he highlighted that some current leases were signed during the past two years when retail sales were under pressure, affecting rental renewals.
Ng warned that if the conflict in Iran persists, it could exacerbate rental pressures. He described the current oil crisis as potentially more severe than the one in the 1970s. While previous conflicts in Ukraine and Gaza had limited impact on Hong Kong, the current situation poses a more direct threat, with rising energy prices potentially leading to increased electricity costs and inflation. This could eliminate the anticipated interest rate cuts and even create upward pressure, severely affecting Hong Kong's economy.
Ng acknowledged the unpredictable impact of geopolitical uncertainties on the global economy this year. Some believe the Middle East crisis could present new opportunities for Hong Kong, as businesses considering relocation to the region might return due to instability. However, Ng noted that this has not yet been observed.
He expressed uncertainty about the duration of the conflict in Iran and emphasized the need for the group to minimize debt and maintain financial stability to tackle potential economic and market challenges. Ng mentioned that Kowloon Wharf Properties has reduced debt by over 2 billion HKD annually in recent years and hopes to maintain this reduction if conditions remain stable.
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