Global retail report says Hong Kong is most expensive place for shop rents
A global report says top rentals in prime areas have soared to over US$927 per sq ft per year
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Hong Kong is the most expensive place in the world for shop rents, according to property consultants Cushman & Wakefield.
A dearth of prime shopping space and the lure of big-spending mainland tourists has driven up top rentals in key precincts to over US$927 per sq ft per year, says Cushman.
The findings come in the first global retail report from Cushman & Wakefield and the International Council of Shopping Centres, released on Monday. Hong Kong was followed in the rental rankings by Buenos Aires in Argentina, where prime rents are US$500 per sq ft per year; and Beijing, where rents are US$404 per sq ft per year.
Meanwhile, investor activity in the market saw 385 shops sold in August, according to Ricacorp Properties. Although the sales' volume was up just 7 per cent from July, the total sales value was up 34 per cent to HK$6.22 billion.
The Cushman report showed that the Asia-Pacific region leads Europe and the Americas in terms of rental growth for shopping centres, with rental rates increasing 2.8 per cent over the past year, versus growth ranging from zero to 0.5 per cent in Europe, and 0.5 per cent in the Americas.
A fast-growing consumer base, new economic policies supporting the retail sector and a growing international appeal all combined to promote Asia's strong retail performance. Cushman says this will support future expansion.
Rents in Shanghai and Beijing, which are popular entry points for international retailers, climbed to US$368 per sq ft and US$404 per sq ft, respectively.
James Hawkey, executive director of Cushman & Wakefield's retail services, said while the shopping centre market on the mainland was in some ways still in its infancy, it was growing fast.
"There is still strong demand from a range of fast-growing retailers and very high levels of development activity," he said.
In the Americas, Latin America has provided a bright spot, according to the report, fuelled by a strong and growing middle class, which, coupled with the existing wealthy class, has "tremendous untapped spending power and high consumption rates".