By Isabella Steger 

HONG KONG--A drop in mainland Chinese visitors has put a dampener on store rents in one of Hong Kong's shopping districts, potentially changing up a retail mix that had catered heavily to mainland shoppers.

In the prime shopping district of Causeway Bay, drugstores--where mainland visitors pack rollaway suitcases with fish-oil capsules, baby formula and beauty face masks--as well as Rolex-selling stores and branches of Tiffany and Burberry had proliferated with the growing flow of customers from across the border in recent years, in the process squeezing out many mom-and-pop establishments and other traditional businesses.

But a chill in the flow and spending of mainland visitors that began with a Beijing-led anticorruption campaign has continued as the Chinese economy slows. Other factors keeping mainlanders away: last year's anti-Beijing protests that partially shut down some of Hong Kong's shopping districts, and local resentment against the crowding from mainlanders; more than 160,000 Chinese tourists visited a day last year on average.

Mainland Chinese tourist arrivals during the seven-day Lunar New Year travel period in mid-February was down 4.3% from the year before, according to Gregory So, Hong Kong secretary for commerce and economic development, in comments to the city's legislature on Friday.

Arrivals for all of February were higher than a year earlier, according to the Hong Kong tourism board, but they fell from January.

Mr. So said the drop has worsened since. In the first three weeks of March, mainland Chinese tourist arrivals fell 13% from a year earlier, he said, adding that the number of mainland tour groups visiting Hong Kong on an average day had plunged by 45%.

In January, retail sales were down 14.6% from a year ago, according to government figures, with sales of jewelry and watches plunging 21.4%.

Rents have also taken a hit. According to preliminary data from Jones Lang LaSalle, average ground-level shop rents in Causeway Bay fell around 3% in the first quarter of the year, the first drop since 2009.

Some Hong Kongers had grumbled that the rapid expansion of businesses selling to mainland tourists had transformed their neighborhoods beyond recognition. The number of shops selling cosmetics and personal-care products rose from 130 in 2000 to 1,440 in 2013, according to Hong Kong government figures.

"Some shops will have to close, especially in the main tourist shopping districts, because there are fewer mainland Chinese visitors now," said Lau Oi Kwok, chairman of the Hong Kong General Chamber of Pharmacy Ltd.

The strength of the U.S. dollar, to which the Hong Kong dollar is pegged, makes other destinations such as Japan, South Korea or Europe more enticing for Chinese shoppers, said Nicole Wong, an analyst at brokerage CLSA.

But she said that the cooling retail boom means opportunities for other kinds of businesses to regain a foothold: "Landlords may begin to rent to shops with more creative differentiation or local character,"

"We could see some stores selling shoes or clothing, not necessarily catering to mainland Chinese tourists, returning to Causeway Bay," said Kenneth Yau, senior regional sales director at Centaline, a property agent.

He said under a recent deal brokered by his firm, a drugstore tenant signed a lease on a popular Causeway Bay shopping street for 450,000 Hong Kong dollars (US$58,000) a month, down from the asking price of HK$700,000.

"Drugstores used to pay as much as HK$800,000 a month, and people were fighting for those leases," he said.

Just a little over a year ago, a McDonald's on Russell Street in Causeway Bay, which has the highest rental rates in the world by some measures, made way for yet another beauty-product chain store.

Now, an employee of one drugstore on the same street said the store's owner wouldn't extend the lease once it ends. At another one, Prestige Pharmacy Ltd., an employee who only gave her last name as Chan said mainland tourists appeared to be spending less per person than before.

"It's very quiet around here now," she said.

At the other end of the street, a manager at a 36-year-old, family-run Vietnamese restaurant, which had planned to close up shop in February, said the restaurant is in discussions with the landlord about the rent and is remaining open for now.

"We see [falling rents] as a good thing. It's creating an opportunity for retailers," said Denis Ma, head of Hong Kong research at Jones Lang LaSalle. "If you look at the retail market over the last two years, the vacancies have been so low that there's been no room for retailers to expand or relocate. It really becomes a landlord's market."

He said luxury stores in another well-known Hong Kong shopping area, Tsim Sha Tsui's Canton Road, which have drawn large numbers of mainland shoppers, are likely to still hold up. "But doesn't mean they won't be affected by a fall in visitor spending," he said.

Write to Isabella Steger at isabella.steger@wsj.com

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