Luxury brands pose dilemma for malls
Hong Kong has always been a fast-changing city. Old buildings are given a new look or demolished to make way for new ones, while favourite old stores are never guaranteed to be there when you next return. No doubt, Hongkongers are accustomed to this changing nature of our city, but still, the pace at which luxury brands have been expanding with megastores around the city has been notable. Luxury brands are no longer content with residing in the discreet corners of a shopping mall for their elite consumers - they now sit proudly on the ground floor, confident in their authoritative status at the top of the commercial hierarchy.
It is no secret that this change has been brought about by the new economic might of mainland visitors. Luxury brands now cater to their new clientele and are willing and able to bid for the most prominent retail spaces.
But while this phenomenon is plain to see, the figures highlighting the high rents in shopping malls still have the ability to shock. The average monthly rent for ground floor shops of around 1,000 square feet in Central was US$70.80 per square foot in the final quarter last year. In comparison, retail rent in Tokyo's Ginza shopping area was US$58.90 per sq ft at the most, while Singapore's prime shopping street was only US$23.60 per sq ft, nearly 40 per cent lower than prices in Mong Kok.
To some extent, this trend was inevitable. Every free-market financial capital would want to cash in on the growth of China's economy. But still, mall developers must now grapple with the dilemma of accepting the high rents of the luxury brands at the risk of undermining the advantages of a more varied shopping mall experience.
Malls once complemented the hectic urban lifestyle by supplying residents with everything they needed under a single roof. The day a shopping mall is wholly occupied by luxury brands is the day it becomes redundant for most local people. Mall operators must hope the mainlanders keep coming.