Shanghai shop rents are showing signs of catching up with those in Hong Kong, buoyed by growing demand from big global brands hoping to capture a slice of wealthy mainland shoppers' demand for luxury merchandise.
The mainland's commercial capital could soon rival Hong Kong as a luxury shopping destination, according to Maureen Fung Sau-yim, a general manager in the leasing department at Sun Hung Kai Properties (SHKP).
She said rents for prime retail space in Shanghai were about half that of Hong Kong but the gap was steadily narrowing.
'The gap in rentals between the two cities will narrow, based on the huge potential in the vast mainland market. China's luxury goods sales will remain robust and give a boost to top-quality shopping malls,' Fung said.
SHKP, Hong Kong's largest developer by market capitalisation, has announced it will launch the second phase of its HK$10 billion Shanghai IFC Mall in the third quarter of next year. It expects to bring a dozen or more new brands and restaurants to the buoyant market.
'We have seen a rising ardour from international brands for prime retail space in Shanghai since the global economic woes have had such a huge impact on their businesses,' Fung said. 'It is safe to anticipate a flourishing mainland retail market in the coming years.'