A lag in Chinese tourists coming into Hong Kong brings down shop rentals in the island, as vacancies grow in prime areas.

Tour groups visiting Hong Kong dropped 80 percent in March as cross-border tensions and pro-democracy protests drive away tourists, worrying retailers who relied on the mainland's once robust demand.

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The government's attack on overspending, which does not seem like it would end any time soon, has sent tourists cashing out outside of China, especially in Japan and South Korea where the currencies have depreciated and made the countries go-to destinations for tourists.

In fact, in Hong Kong's famous Causeway Bay, renting a classroom size area of about 500-square feet (or 46 square meters) no longer seems attractive to retailers due to its lavish monthly rental costs of HK$500,000 (US$46,000).

"If they don't cut the rent, I will leave," claims the head of a consumer goods chain with a shop in Causeway Bay.

He says revenues declined as much as 30 percent in the past year with only half the typical number of mainland Chinese tourists pouring in. Refusing to be named, the same retailer lament that they cannot bear the costs.

Tom Gaffney, head of retail property consultancy Jones Lang LaSalle notes that the slump in their businesses has caused them to return the keys to their landlords.

Hong Kong retail sales two months prior slid to its lowest level in 12 years, which property agents consent to being a major cause for retailers to either negotiate lower leases or simply leave. To add to this, luxury retailers like Chanel plan to cut prices in Asia as the euro continues on its descent.

There may be a further strain on the retail industry in Hong Kong from potential restrictions the government would impose on multiple daily visits to Hong Kong. Day-trip goers made up approximately 60 percent of the 47 million mainland Chinese visitors to the island in 2014. 

TagsHong Kong, retail rent, China visitors, Chinese Tourists