• Home
  • Executive
  • Report
  • Hong Kong retail rents plummets 20 percent

Hong Kong retail rents plummets 20 percent

By Don-Alvin Adegeest

loading...

Scroll down to read more

Once the retail mecca of the East, Hong Kong has struggled in the face of China's economic slowdown seeing tourist numbers fall and decline in luxury shoppers.

The downturn has meant retail rents, once the most expensive in the world, are down by an estimated 20 percent as retailers struggle to make their margins.

A CBRE report forecasts the pace of the decline will slow to 10-15 percent next year, given a lower base of comparison, but retail landlords will likely continue to struggle with the decline in tourist consumption.

Sales momentum of upmarket goods, which have been more tourist-oriented, are expected to remain slow, but mass market sales should have more resistance.

Facing the sluggish sales, luxury brands including Prada, Gucci and Miu Miu have unexpectedly offered discounts up to 50 percent off to attract shoppers ahead of the Christmas trading season.

Long lines of shoppers – mostly from mainland China – have formed in front of the stores, a scene which has been missing from Hong Kong’s high streets since Chinese tourists find new shopping destinations elsewhere in Asia such as Japan and South Korea.

Demand for shopping centre space, the report wrote, would remain resilient despite lower turnover rents.

A bright spot next year for Hong Kong’s real estate market is expected to be in the office market, as the potential launch of Shenzhen-Hong Kong Stock Connect drives up demand from mainland Chinese companies.

HONG KONG
Retail