Causeway Bay and Tsim Sha Tsui retain allure for retailers in spite of sluggish times

The prime shopping hubs of Causeway Bay and Tsim Sha Tsui, among the most expensive in Hong Kong in terms of rental costs, remain attractive for retailers amid overall sluggishness in the sector.

Retail rents in Causeway Bay fell 8 per cent in the rental index in the third quarter and 10 per cent in Tsim Sha Tsui, and they are expected to decline further next year, according to a Colliers International report.

These declines came amid a 19-month drop in retail spending in the city, with overall sales dropping 9.6 per cent year on year in the first nine months of the year.

Spending in Hong Kong has been depressed by an 8.7 per cent fall in mainland tourist arrivals during the period.

The retail industry in the city as a whole is undergoing a consolidation as tourist traffic from the mainland continues to thin, pushing down shop rents in the near term, according to David Ji, the head of research for greater China at Knight Frank.

In Hong Kong, the four major retail districts of Causeway Bay, Central, Tsim Sha Tsui and Mong Kok had all seen rental corrections, said Terence Chan, the head of Hong Kong retail at JLL.