Core Viewpoint - The Hong Kong street shop market has entered a "low valley period" due to multiple factors including the overall economic environment, insufficient tourism recovery, and weak consumer confidence, with expectations of a price and rent decline of less than 5% in the second half of the year, and a potential 10% drop in rents for industrial buildings and core commercial areas [1] Group 1: Market Conditions - The rental prices for street shops have decreased by 50%-80% from their peak, leading to a significant adjustment in tenant structure [2] - The vacancy rate for street shops across various regions is between 5%-10%, indicating a slow overall recovery [2] - The market is shifting from "landlord-dominated" to "tenant-dominated," with landlords needing to lower rents or offer incentives to attract tenants [2] Group 2: Consumer Behavior - Hong Kong residents, particularly families, are increasingly choosing to shop in mainland China due to lower prices and better service experiences, which has become an irreversible trend [1] - Tourists are now more inclined towards "check-in style" deep travel rather than high-consumption shopping, which has negatively impacted the retail and hotel industries [1] Group 3: Business Strategies - Landlords must recognize the reality that the rental income is determined by what tenants can afford, with many landlords willing to reduce rents to avoid vacancies [2] - Tenants face heavy costs beyond rent, such as labor and inventory, leading many to consider closing stores if revenues do not meet expectations [3] - The overall recovery of the street shop market is contingent on the revival of the economy, as past consumer spending and tourist influx are essential for business viability [3] Group 4: Investment Trends - Current investors are primarily focused on "liquidating" their assets due to banks requiring a reduction in mortgage ratios for commercial properties, leading to a greater willingness to sell than to buy [3] - The speed of asset liquidation has slowed as the more desirable properties have already been sold, leaving less attractive assets on the market [3]