Lululemon opens first street-facing store in Central, Samsung takes up prime space as Hong Kong’s retail rent tumbles by a third
- Shop rents declined by 34 per cent between first quarter of 2018 and the third quarter of this year, Colliers says
- Queen’s Road Central resilient because it ‘also caters to the domestic market and is not mainly reliant on mainland Chinese tourists, unlike Russell Street’
Shop rents in the area have declined by 34 per cent from HK$745 (US$95.5) per square foot a month in the first quarter of 2018 to HK$495 per square foot a month in the third quarter of this year, according to property consultancy Colliers.
Canada-based Lululemon has taken up a 3,620 sq ft space in H Queen’s, its first street-facing shop in Hong Kong and the first that occupies two floors. The store was vacated by baseball cap seller MLB after a two-year tenancy.
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“We are excited to launch our first street-front store in Hong Kong on Queen’s Road Central,” said Gareth Pope, senior vice-president, Lululemon, Asia-Pacific. “As our ninth location in Hong Kong and 88th store in the region, it underscores the strength of this market and our growth momentum across Asia-Pacific. Establishing our presence in this iconic location will bring us even closer to our community.”
The district was not unaffected by the anti-government protests in the city in 2019 and the Covid-19 pandemic. Fashion retailers Gap, Topshop and Esprit were among brands that leased space along the same road, but have since vacated their stores. However, with brands coming in and leasing shops, Queen’s Road Central has proved to be more resilient than Russell Street in Causeway Bay, once the world’s priciest retail strip.
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A number of foreign brands have expanded in Central of late. Samsung has taken up space in New World Tower, which is also on Queen’s Road Central. Casual clothes brand American Eagle took up a 7,000 sq ft space vacated by Gap in LHT Tower. In October last year, mid-priced French sporting goods retailer Decathlon rented a 9,300 sq ft shop previously rented by luxury leather goods retailer MCM in Entertainment Building, also on Queen’s Road Central.
“Queen’s Road Central has its own identity. For brands that are either coming in to Hong Kong, or are in an expansion mode, they always look for Queen’s Road Central. I think it’s because the district can capture both white-collar workers – those in the financial industry – and also tourists,” said Hannah Jeong, head of valuation and advisory services at Colliers. “In short, the district also caters to the domestic market and is not mainly reliant on mainland Chinese tourists, unlike Russell Street.”
Russell Street is seeing a major overhaul of its tenants mix. Once occupied by luxury brands such as Italian fashion label Prada and high-end lingerie maker La Perla, the street is now mostly occupied by medical masks retailers. For example, British luxury fashion house Burberry will shut its flagship store on the street early next year, when its 10-year lease expires.
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“Russell Street is only likely to recover once the border with the mainland reopens,” Jeong said. “But we don’t know when that is and if mainland tourists will come back.”
