The number of vacant shops is growing, and community malls in Hong Kong are in a rather bleak situation.

On a weekend afternoon, the second-floor escalator in Kwai Chung Plaza, Hong Kong, was crowded with people buying snacks. Turning towards the exit of Kwai Fong Estate, the noise quickly died down — in a short corridor, 7 out of 17 shop units were available for lease.

Bustle and bleakness are separated by only one street. Similar scenes are appearing across all districts of Hong Kong. Hung Hom Plaza is barely kept afloat by restaurants and claw machine stores; foot traffic has faded from Mongkok Trendy Zone, Siu Wan Centre and Hollywood Plaza; old shopping malls in Tsuen Wan and Sham Shui Po are dotted with vacant units.

Figures are more intuitive than the iron shutters of empty shops. Data from JLL shows that the vacancy rate of high-quality shopping malls in Hong Kong has risen from 6.0% in the second quarter of 2023 to 13.7% in the second quarter of 2026, more than doubling in three years.

At the same time, the number of Hong Kong residents traveling north to the Chinese mainland has been rising continuously. Sam's Club, Costco and Freshippo in Shenzhen, with lower prices, larger shelves and richer experiences, have lured middle-class Hong Kong families across the Shenzhen River one by one. Hong Kong residents say they "support local businesses", but the weekend foot traffic tells the whole story.

However, not all parts of Hong Kong are deserted. During the May Day holiday, long queues formed outside luxury stores on Canton Road, Tsim Sha Tsui, and consumption of jewelry and luxury watches at Harbour City increased significantly; Hysan Place and SOGO in Causeway Bay saw heavy footfall, and almost no vacant shop was recorded near the Flower Market in Mong Kok.

Tourists are buying luxury watches, while local residents are traveling north. The community shopping malls sandwiched in between are becoming the biggest losers in this consumption transformation.

01.

From 6% to 13.7%, the number of vacant shops in Hong Kong's shopping malls keeps rising

In 2023, Hong Kong and the Chinese mainland fully resumed normal travel, and owners of major shopping malls were greatly encouraged, but the dividend period actually lasted for less than a year.

JLL data shows that in the second quarter of 2023, the vacancy rate of high-quality shopping malls in Hong Kong once dropped to 6.0%, hitting a new low for many years. Leasing activities continued to increase in core areas, and brands closely related to tourism such as jewelry, gold and watches, catering, as well as pharmacies saw a significant expansion in demand for shop spaces.

However, the good times did not last long. In the third quarter of 2023, the vacancy rate quietly rebounded to 6.4%. Even though the vacancy rate rose in the second half of the year, rents still recorded a 2.7% increase, and the overall market remained relatively optimistic.

By 2024, the situation took a sharp turn for the worse. In the first half of the year, rents for high-quality shopping malls in Hong Kong still managed a meager 0.9% increase, but the momentum stalled completely in the second half of the year, with rents shifting from rising to falling, recording a 2.3% annual drop for high-quality mall rents, while the vacancy rate climbed all the way to 8.9%.

From 2025 to mid-2026, the vacancy rate continued to hit new highs, rising from 10.5% in mid-2025 to 13.7% in mid-2026, and the decline in shopping mall rents widened.

Behind the soaring vacancy rate is the simultaneous impact of multiple negative factors.

New shopping malls are coming one after another, and old malls face sharply rising pressure to attract tenants

Since 2023, new large-scale shopping malls have been completed and opened in Hong Kong. The demand for brand tenants cannot keep up with the speed of new malls being built, and some malls are located in non-core areas, making leasing even more difficult.

Wing Wai Chan, Senior Director of Retail Services at JLL Hong Kong, mentioned in mid-2025 that from 2022 to 2028, more than 8 million square feet of new shopping mall space will be completed across various districts in Hong Kong. Taking Kai Tak as an example, AIRSIDE was completed in 2023, The Cullinan Sky Mall opened in phases at the end of 2025, and large-scale projects in Causeway Bay and Central have also been completed one after another.

New shopping malls are willing to offer preferential rents to attract tenants in order to achieve high initial occupancy and foot traffic, and even offer longer rent-free periods to reduce actual rental costs, which has multiplied the competitive pressure on old shopping malls.

Hong Kong residents' consumption outflow to the north, e-commerce giants enter Hong Kong to seize customers

In 2023, Hong Kong's focus had not yet fallen on "traveling north", but more broadly on the tendency of Hong Kong residents to travel abroad, worrying that the rebound in outbound travelers would outpace that of inbound travelers. In fact, the number of Hong Kong residents traveling north had already reached 53 million that year.

In 2024, this figure soared to 81.91 million, a year-on-year surge of more than 50%, and the number continued to rise until it gradually stabilized. Sam's Club, Costco and Freshippo in Shenzhen, with lower prices and larger shelves, have lured middle-class Hong Kong families across the Shenzhen River one by one. As the consumption enthusiasm of Hong Kong residents traveling north remains high, Shenzhen Bus Group even launched the free holiday shuttle bus "Sam's Port Link" in mid-2025, making it convenient for Hong Kong residents to take a direct bus to the supermarket right after crossing the border.

At the same time, the mature online shopping model in the Chinese mainland has gradually penetrated into Hong Kong. E-commerce giants such as Taobao, Pinduoduo and JD.com have entered Hong Kong on a large scale since the fourth quarter of 2023, continuously increased their investment, successfully realized "direct delivery to Hong Kong", and all launched landmark free shipping policies in the second half of 2024. Online shopping has become part of Hong Kong people's daily life, quickly squeezing the space for local daily retail.

Retail properties in community malls have fragmented ownership, making it difficult for owners to cut rents

Hong Kong's real estate sector used to be prosperous. Some shop units in old community malls in residential districts were split up and sold to individual private owners, while some other units were mortgaged to banks, making it impossible for owners to cut rents significantly.

It is reported that when shop owners take out mortgage loans from banks, there are clauses requiring that the rent shall not be lower than the interest. If the outstanding balance of the loan is large, once the owner reduces the rent, the bank will re-evaluate the market value of the shop based on the new, lower rent. If the bank believes that the value of the shop is no longer sufficient to cover the loan, it will require the owner to make up the difference. If the owner cannot afford the money, the bank will "call loan" (demand early repayment), leading some owners to prefer leaving the shop vacant rather than cutting the rent, since keeping the unit empty can at least maintain the book value.

In addition, in order to increase the value of their shop units, owners often split the purchased shops into smaller units for lease or even resale, making the ownership structure more complex. These shopping malls are known as "cage malls". Among the numerous small owners of these "cage malls", on the one hand, they are competitors to each other and it is difficult to reach a consensus on rent adjustment; on the other hand, it is hard for them to reach a consensus on collective renovation plans, resulting in outdated formats and facilities, which are eventually replaced by new shopping malls in the district.

02.

Vacant shops are spreading, old shopping malls are reduced to "dead malls"

As the vacancy rate rises, old shopping malls in Hong Kong are being emptied of people.

From Mong Kok, Tsuen Wan, Hung Hom to Sham Shui Po and Kwai Chung, these prosperous places that carry the collective memories of several generations of Hong Kong people, once fashion landmarks, local food streets and community centers, have now been reduced to "dead malls" in the tide of the times.

Kwai Chung Plaza: not a "dead mall", but no longer as prosperous as before

Kwai Chung Plaza, once known as the "paradise of local delicacies" for Hong Kong residents, is a symbol of community shopping malls in Hong Kong. In July this year, some netizens posted that the second-floor food street was "almost all closed" and had become a "dead mall", triggering heated discussions online. However, a media on-site inspection found that the mall still has heavy foot traffic, and the area concentrated with snack shops still saw a large number of customers from 2 p.m. to 5 p.m., which is not the deserted "dead mall" scene as rumored.

However, it is worth noting that the foot traffic in Kwai Chung Plaza is extremely concentrated — a large number of customers are mainly in the food area near the MTR station escalator on the second floor and the entire third floor, leading to the phenomenon of a "vacant shop alley" in part of the second floor, where 7 out of 17 units are closed for lease, which is indeed a far cry from its past glory.

In fact, the rising vacancy sign in Kwai Chung Plaza already emerged in 2024. A number of shops withdrew at that time, especially clothing stores that were most affected by consumption outflow and online shopping. Some empty shops were converted into unmanned stores such as selfie studios and claw machine parlors.

Some merchants revealed that a shop unit of only 40 square feet in Kwai Chung Plaza costs as much as HK$30,000 to HK$50,000 per month, and the rent for catering shops is the highest, so some owners hold the tangled mindset of "preferring to leave the shop vacant rather than lease it out".

The current situation of Kwai Chung Plaza reflects the common dilemma of the first batch of split-sale old malls in Hong Kong:

First, the continuously high rent is passed on to consumers, making the prices of characteristic snacks no longer "affordable for ordinary people";

Second, fragmented ownership leads to the impossibility of unified planning, making it impossible to carry out overall tenant distribution planning and rent adjustment;

Third, new shopping malls in places such as Central Market and West Kowloon, with more sound management and even lower rents, have attracted a number of well-known tenants that started their businesses in Kwai Chung.

Hung Hom Plaza: from bustling with life to completely deserted

Hung Hom Plaza was completed in 1982, it has been in operation for more than 40 years, and was once a popular leisure spot for local residents, with cinemas, comic shops, game centers, camera shops and other facilities all available.

But by 2026, foot traffic in Hung Hom Plaza has dwindled, the mall is dotted with vacant units, and the second-hand record stores that used to have a loyal customer base have closed down, replaced by multiple claw machine stores. At present, the foot traffic of the mall is only supported by several restaurants, which are mainly visited by surrounding residents and office workers for meals.

Hung Hom Plaza is in a good location, with residential buildings, schools, industrial buildings and churches nearby, and mainland tour groups often pass by, but passenger flow cannot be guided into the mall for consumption.

The decline of Hung Hom Plaza also represents the dilemma of old-style shopping malls in Hong Kong. Under the multiple impacts of the increasing supply of large new shopping malls in the district, online shopping and northbound consumption, it failed to achieve transformation in time, and once the foot traffic started to drain, it could no longer be recovered.

Mong Kok's "fashion hub": collective decline, the downward trend continues

Mong Kok, the synonym for Hong Kong's fashion and digital culture, is a "sandwich area" where local livelihood, tourism and retail are intertwined.

It is not the main area for the expansion of Hong Kong's financial industry, nor is it covered by the event economy. Driven by local consumption, it has been continuously impacted by the dual trends of northbound consumption and online shopping, leading to the collective decline of multiple community shopping malls.

Mongkok Trendy Zone opened in the late 1990s, with 4 floors including the basement. From 2001 to 2011, it was a must-visit fashion mecca for young people in Hong Kong, focusing on Japanese and Korean fashion and various trend products, and even had to implement foot traffic control at its peak. A wave of vacant shops began to appear in 2017. There was a plan to lease the entire third floor as a whole but it failed, and more than half of the stores closed after the pandemic.

Siu Wan Centre in Mong Kok has also fallen into difficulties after the travel resumption. The mall most recently attracted public attention due to the Mixue withdrawal incident. In 2024, Mixue entered the Hong Kong market. It was reported that the brand leased the ground-floor shop of the mall at a monthly rent of about HK$190,000, equivalent to HK$231 per square foot. In addition to Mixue, two consecutive popular all-you-can-eat restaurants in Siu Wan Centre closed down, and the shop owner bluntly recorded "unprecedented losses".

Siu Wan Centre in Mong Kok, which opened in the mid-1990s, was once a representative of millennium fashion culture, famous for selling fashion apparel and trendy toys, and many well-known all-you-can-eat restaurants settled in it. In recent years, its popularity has declined. Some merchants have long held retro fashion markets in the mall and set up various photo spots to attract customers, but the downward trend still cannot be reversed.

In addition, Mong Kok Computer Centre which mainly sells computer accessories and Hollywood Plaza which focuses on custom-made men's suits have both been reduced to "dead malls" in the district, with no sign of recovery.

03.

Major reshuffle of tenants: who is entering the market and who is exiting?

Behind the vacant shops in many old shopping malls in Hong Kong is a silent major reshuffle of tenants.

Mainland brands: from "opening 10 stores at the same time" to full withdrawal

Since the end of 2023, mainland brands, especially catering brands, have flooded into Hong Kong. At the peak, dozens of brands opened stores in the same year, which once boosted Hong Kong's retail property leasing market.

At that time, the trend of northbound consumption had already emerged, and many Hong Kong residents were checking in at popular mainland catering brands in Shenzhen, which gave the market a new judgment:

■ On the one hand, some Hong Kong shopping malls realized that Hong Kong residents recognize some mainland brands, and hoped to introduce these brands to boost popularity and keep Hong Kong residents consuming locally;

■ On the other hand, some brands also hope to use the Hong Kong market as a springboard for internationalization, to gain overseas expansion experience in Hong Kong first, and then seek to enter more regions and countries.

However, the good times did not last long, and the fate of mainland brands in Hong Kong soon diverged.

Nong Geng Ji entered Hong Kong in September 2023, with its first store located in Jordan, and has now expanded to about 9 branches. Baheli Beef Hotpot opened its first store in Sha Tin New Town Plaza in December 2024, and plans to open two to three more branches. Green Tea Restaurant settled in Hysan Place, Causeway Bay in August 2024, and currently has about 10 stores in Hong Kong, and was successfully listed on the Hong Kong Stock Exchange in May 2025.

In sharp contrast is a group of "fast in, fast out" brands. In 2024, Ningji seized the Hong Kong market with the gesture of "opening 10 stores at the same time", but all its stores closed down in June 2026. The soufflé brand fufuland had 11 branches in Hong Kong at its peak, and all its stores ceased operation in July 2026. Since Mixue entered Hong Kong at the end of 2023, it opened 10 stores in the first 10 months, but 5 branches have been closed within this year. The Ningji and fufuland stores located in Sha Tin New Town Plaza are in the most "extreme" situation, announcing closure only 3 months after opening.

Seita Laotai, once known as the "mainland