Hong Kong’s upmarket mall Festival Walk will remain closed until the first quarter of next year, leaving branches of big retail and catering brands to suffer revenue losses in the peak festive period of Christmas and New Year.
Singapore-listed Mapletree North Asia Commercial Trust has announced details on the reopening of its severely damaged Kowloon Tong shopping mall, weeks after protesters vandalised multiple floors and also set a large artificial Christmas tree on fire.
The mall’s owner said it would need to repair glass entrances, glass curtain walls, escalators, lifts, and glass balustrades along the common areas.
“We are working closely with our consultants and contractors to reopen, either partially or fully, in the first quarter of 2020,” the trust’s manager said in a statement on Wednesday.
The manager said the reopening would also be subject to approvals to be obtained from the authorities, while adding that retail tenants’ rents would be waived during the closure.
“While the loss of retail and office revenue, as well as the damage to the property, are covered under insurance policies, the assessment of the quantum of revenue loss and property damage recoverable by insurance claims is currently underway,” the statement read.
The mall is owned partially by Temasek Holdings, Singapore’s sovereign investment fund.
During the six-month period to September 30, tenant sales at Festival Walk stood at HK$2.4 billion (US$306.5 million), the trust revealed to the Post last month.
Hong Kong has been rocked by almost six months of social unrest arising from the now-withdrawn extradition bill.
Violence hit the mall on November 12 when black-clad radicals broke glass and railings on several floors of Festival Walk, with some hurling a petrol bomb at its signature Christmas Tree that went up in flames.
The vandalism forced the 1.2 million-square-foot shopping-and-office complex to close on November 13. The office tower was resumed on November 26. The rents of the office tenants were waived for the period of the closure.
Business at the shopping centre, which has more than 200 retail stores and restaurants, has ground to a halt since November 13. Festival Grand cinema at the mall is also closed.
Many big brands have a branch at the mall, including Apple, fashion chain H&M, Marks & Spencer and Uniqlo, as well as Starbucks Coffee and Venchi.
The closure, which could last up to five months, will mean even less earnings for businesses already struggling from a sharp decline in tourist arrivals and weak consumer sentiment under the shadow of political unrest.
A CEO of a 13-strong restaurant group that runs an eatery in Festival Walk said anonymously that it had to pay HK$1 million a month in salaries to some 50 staff and payments on bank loans.
“Other than the payment, we forgo revenue from this restaurant over the five months of closure,” he said.
“We can’t just lay off the employees, because we will need them when the restaurant resumes business here. Now, they are either on leave or working at other restaurants of the group.”
Simon Wong Kit-lung, CEO of the listed restaurant firm LH Group, said about 40 employees of his two branches at Festival Walk had to be relocated to his other eateries.
Wong refused to disclose the actual impact of the mall’s closure on his business, but he said many other businesses in the food and beverages sector were not positive about the outlook for the months to come.
Jewellery chain Luk Fook Holdings said the mall operator had also exempted other charges for tenants, while all its employees were deployed to other branches.
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