Competition among shopping malls in Causeway Bay has always been fierce. Now, a new player is jumping into the fray. Hysan Place, located across Hennessy Road from Sogo department store, is set to open on August 10, immediately becoming the second-largest shopping center in the popular district.
The mixed-use tower will boast total gross floor area of about 710,000 square feet, spread over 17 floors of retail outlets and 15 levels of office space, along with a four-story car park and retail basement.
Of the shop space, 98 percent has been leased to more than 100 brand names.
"Hysan Place for sure will bring more shoppers to Causeway Bay, just like Times Square did when it opened in 1994," said Cares Wong Kam-fung, a senior sales director at Centaline Property Agency. "The rooftop garden is likely to attract the younger batch of shoppers."
Market sources said accountancy firm KPMG has signed a nine-year lease for the 20th to 25th floors of the building, taking up about 80,000 sq ft.
Other notable tenants include Taiwan bookstore Eslite, which is taking three floors of retail space, or 41,000 sq ft; and US clothing retailers Hollister and Gap, leasing 20,000 sq ft and 7,000 sq ft, respectively.
The sources said Apple Inc has leased about 20,000 sq ft to open its second Apple store in the SAR, following its first outlet in the IFC mall of similar size.
Upscale supermarket Jasons Food and Living is also occupying space on one of the basement floors at Hysan Place.
The project owner, Hysan Development Co (0014), currently holds a total 1.3 million sq ft of retail space in Causeway Bay, taking the lead among its peers in the coveted district.
Wharf Holdings (0004) has 940,000 sq ft - most of it at Times Square, the area's largest mall at 901,000 sq ft. Chinese Estates Holdings (0127) and Hang Lung Properties (0101) hold 900,000 sq ft and 400,000 sq ft in the district, respectively.
Sogo is expected to be hardest hit by the opening of Hysan Place. "The mall is located right opposite to Sogo. It's huge and new. It would not be surprising to see it luring away 50 percent of Sogo's customers," said a realty agent who declined to be named.
In fact, the share price of Lifestyle International Holdings (1212) - the parent of Sogo - has fallen by more than 20 percent in the past two months, while Hysan's stock has climbed steadily.
Hysan shares closed yesterday at HK$32.60, up 3.5 percent.
Back in 2004, the government's Planning Department originally intended to connect Hysan Place and Sogo via an underground mall in order to ease pedestrian traffic at street level. However, that plan failed to materialize.
Retail rents in the neighborhood have jumped sharply, probably due to the upcoming opening of Hysan Place.
Chow Sang Sang renewed its lease at its 500 sq ft premises on nearby Russell Street at HK$2.2 million a month - triple the HK$730,000 under its previous contract - or HK$4,400 psf per month.
Meanwhile, half of the shops on Kai Chiu Road, behind Hysan Place, have been taken over by luxury brands, with rents more than doubling.
But the retail industry's shining star may be dimming this year due to the potential slowdown of mainland visitor spending.
Early this year, DTZ Debenham Tie Leung predicted retail rents in prime locations would see a 20 to 30 percent rise. But in June, DTZ revised its forecast downward to a 10 to 15 percent hike due to a bit of belt-tightening by mainland tourists.