Restaurateurs see opportunities in Hong Kong as retail rents slip
Watch, handbag and jewellery retailers have been closing stores
After waving goodbye to the boom in mainland Chinese arrivals, Hong Kong’s retail leasing market is refocusing on broad-based, local consumption, including food and drink.
Hong Kong shopping streets are changing as luxury shops, including watch, handbag and jewellery retailers, close stores, and restaurateurs see opportunities.
“New dining brands entering Hong Kong in the past year were pretty successful,” said Helen Mak, retail services group head at Colliers International. “Celebrity chefs like Gordon Ramsay and Jamie Oliver have just opened their second restaurants in Hong Kong recently.”
Hong Kong retail sales fell for six straight months to the end of August as mainland tourists spent less. Luxury retailers have been scaling back their operations as a result.
According to data from DTZ, in the first eight months of this year high street rents declined by 29 per cent year on year in Causeway Bay and by 34 per cent in Tsim Sha Tsui.
In September, cosmetics retailer Colourmix paid 60 per cent less than the former tenant, luxury Swiss watch brand Jaeger-LeCoultre, to take its space in Causeway Bay’s Russell Street, one of the most expensive shopping strips in the world.
High street rent in Hong Kong’s four top shopping districts, including Causeway Bay and Tsim Sha Tsui, surged as much as 213 per cent from 2003 to 2014.
“Restaurant rents are much more stable than storefront luxury shop rents,” said Kevin Lam, DTZ’s head of business space. He said restaurant rents in the four top shopping districts had grown by an average of about 10 per cent a year since 2010.
“Dining out is already an integral part of Hong Kong culture and Hong Kong people love to welcome food from different countries,” Mak said. “Even for mainland visitors, they may shop less but they won’t give up the food experience in Hong Kong. The future of dining business is promising here.”
She said many dining brands outside Hong Kong, including some from Europe, the United States, South Korea and mainland China, wanted to expand here and were looking for places to rent. Popular mainland hotpot brand HaiDiLao is among them.
“Shop owners used to be too reliant on luxury shops,” Mak said. “Now we finally have a supply of spaces for other business.”