As the local retail market remains weak, the vacancy rate for shops continues rising, with many short-term rental retailers seizing the opportunity to move into the core retail districts - albeit temporarily.

Statistics from Sing Tao Daily, sister newspaper of The Standard, showed some 20 short-term rental agreements were reached over the past two months in the four major retail districts of Central, Tsim Sha Tsui, Causeway Bay and Mong Kok.

About 70 percent of the short-term deals were signed by retailers selling red packet envelopes in preparation for the Lunar New Year. This indicated the seasonal factor played a significant role in driving demand for short-term rentals.

Other cases involved retailers of either fashion or accessories. For example, a 700-square-foot shop on Russell Street in Causeway Bay - traditionally among the most expensive areas for retail space internationally - was recently leased to a vendor selling lai see envelopes for three months at HK$500,000 per month.

The shop had been left vacant for some months after CSS Jewellery moved out. The jewelry store was paying HK$2.2 million per month.

The landlord, veteran investor Lai Wing-to, said the big brands usually don't make major moves near the end of the year, and that is why he decided to rent out the store on a short-term basis while he continues to seek a long-term tenant.

Lai forecast that mid- or low-priced brands or daily necessity retailers were the most likely to expand in the short term.

In Mong Kok, a 522 sq ft ground- level shop on Sai Yeung Choi Street, left vacant for about a year, was rented out to a retailer selling red packets for HK$300,000 per month on a short-term basis. Those premises sat empty for about a year following the departure of the previous tenant, a watch and jewelry company. Normally, the landlord charged HK$750,000 a month on a long-term lease for the space.

In Central, a 1,350 sq ft ground-level shop at The Galleria, on Queen's Road Central, was recently let to a fashion store on a short-term contract for about HK$200,00 per month - one-third of the HK$600,000 previously paid by tailor and menswear shop Gieves & Hawkes.

One property agent pointed out that as the retail market continues its slump, many landlords have been forced to accept reality and rent out their shops short-term so as to generate some income.

Savills reported this month that some luxury retailers were drawing parallels to the 1998 Asian financial crisis, and street shop rents have been quick to adjust.

The global real estate service provider said further drops in rents are expected, with prime street shop rents falling 5-10 percent in 2017.

Meanwhile, in the residential rental market, many potential buyers have scrapped plans to buy flats and are instead resorting to renting themselves. This followed the government's introduction last month of the flat 15 percent tax on purchases made by non-first-time buyers, and further exacerbated by the interest rate hike imposed by the US Federal Reserve this month.

So driven by growing demand for rental accommodation, rents at several housing estates have climbed as a result of the cooling measures.

In Tin Shui Wai, Centaline branch manager Danny Wong said the average rent per saleable square foot for flats at Kingswood Villas has jumped from HK$19 before the latest cooling measures, to HK$21 at present.

He noted that while the inventory of available rental stock has remained static, the number of clients looking to rent is now close of that of peak seasons in the past, and rents are being pushed up by the lack of supply.

For instance, a 633 ssf flat at Sherwood Court in Kingswood Villas was recently rented out at HK$13,300 per month - 6.4 percent higher than the HK$12,500 for similar units prior to the cooling measures.

Midland Realty sales manager Victor Chung said a 377 ssf flat at Tsuen Wan Centre is now fetching a monthly rent of HK$12,000, or HK$31.80 per ssf, compared with the average rent during the summer high season of HK$28.50 per ssf.

Ricacorp Properties chief executive Willy Liu Wai-keung forecast rents for small and medium-sized flats to rise 8 percent in 2017, while luxury flats will see 3 percent hikes.