Local, overseas retail operators help improve property sector
Local and international retailers have taken advantage of the prevailing low rentals to open shops, providing a relief to the retail property sector.
Property consultant CB Richard Ellis said retail sentiment improved with the stabilising economy and the recent increase in the number of tourist arrivals.
In the first half of this year, a number of international retailers had taken advantage of the lower prevailing rents to establish an initial presence in Hong Kong, it said.
For example, US-based international retailers Gateway Computers and Outback Steakhouse were planning to launch their first flagship operations in Hong Kong within the second half of the year.
CB Richard Ellis said it was common for international retail operators to choose relatively large shop spaces within major shopping centres as the location of their first stores.
'The choice of such large shop spaces permits greater flexibility in positioning shop displays to maximise customer attraction,' it said.
'The choice of a shopping centre in a prime location, furthermore, tends to lower the risk that a retailer's first store will fail to achieve impact.' Prime shopping centres provide the exposure to heavy flows of pedestrian traffic, the guarantee of professional management and the assurance of positioning within a merchandising mix.
According to CB Richard Ellis, Gateway has taken 1,600 square feet of space in Times Square in Causeway Bay and 1,800 sq ft in Festival Walk in Kowloon Tong while Outback Steakhouse has leased a total of 4,990 sq ft in Discovery Park in Tsuen Wan and 6,500 sq ft in Pearl & Jade Plaza in Causeway Bay.
The consultant also said many existing, well-established retailers had gone ahead with their expansion plans despite the lack of full turnaround in the retailing market.
For example, consumer electronics retailer Fortress opened another two retailing outlets in Tsim Sha Tsui and Mongkok and Kentucky Fried Chicken leased 5,400 sq ft in Plaza Hollywood in Diamond Hill.
CB Richard Ellis said there were signs that the stabilising economy was beginning to provide firmer support for the retailing sector, with total retail sales turnover having increased 1.4 per cent in April, compared with March, to $14.3 billion.
Consumer confidence, which had been badly shaken along with the soaring rate of joblessness, had improved considerably as unemployment had recently shown signs of stabilising at the level of 6.3 per cent, it said.
The picture with respect to economic growth began to appear brighter. The number of tourist arrivals also rose to 897,652 in April, up 4.2 per cent, compared with March, adding fuel to the hope that the retail environment would continue to improve in the medium term, CB Richard Ellis said.