HK still the top location for luxury brand shops
Hong Kong remains the leading location in the world for luxury brand outlets, topping the charts for a third year running, global property consultant CB Richard Ellis says.
The city also retains its title as the number one Asian location for international retailers across the sector.
CBRE's latest report shows that Hong Kong leads the way for luxury and business fashion, with 86 per cent of high-end retailers surveyed present in the city, a rise of 2 per cent from the 2011 survey results.
The sustained strong demand for space from international retailers drove up overall prime retail rents in the city by 1.9 per cent from the previous quarter, or 14.3 per cent from a year ago, to an average HK$584 per square foot in the first three months, according to CBRE.
Meanwhile, Jones Lang LaSalle said leasing demand had pushed up rents by 4.5 per cent for both prime street shops and premium centres in the first two months, while capital values for prime street shops rose a further 9.7 per cent.
But the pace of rental increases is expected to slow, CBRE said, as prospective tenants baulk at paying more.
'We expect that sustained demand from international brands for prime retail space will support rents in upcoming months. However, while positive rental growth is expected, I do expect to see the rate of growth decelerating from the heady heights of 2011,' said Joe Lin, CBRE's senior director of retail services in Hong Kong.
Lin said a slowdown in rental growth suggested Hong Kong may have entered a 'more mature phase' in the development of its retail market. 'Some international retailers are hesitant about keeping pace with the seemingly constant rise in rents and have shifted to shopping malls. Furthermore, some mid-range retailers are deterred by high rents and do not view Hong Kong as an automatic point of entry for the Asian market,' he said.
But Jones Lang LaSalle Hong Kong's head of retail, Tom Gaffney, believes the city will remain a key focus and a dominant market for retailers this year and expected to see another year of solid retail sales, rental growth, and transactions.
According to the CBRE report, Hong Kong was host - across the retail spectrum - to 40.5 per cent of the international retailers surveyed, retaining its status as Asia's number one retail city - four places ahead of Singapore, but moving down one place to sixth in the global rankings, behind London, Dubai, New York, Moscow and Paris.
London topped the rankings in the overall presence of foreign retail outlets, ahead of last year's joint leader Dubai, with 55.5 per cent of international retailers present.
CBRE's annual survey - now in its fifth year - has been expanded to map the global footprint of 372 of the world's top retailers across 73 countries to identify trends in global retail expansion at country and city levels covering the vast majority of the world's economy.