Hong Kong leaves New York in the shade for prime retail rents
Prime sites 46pc more expensive than in Big Apple and four times higher than London
Bad news for small shopkeepers - Hong Kong still has the most expensive prime retail rents in the world, according to property consultancy CBRE.
At US$4,335 per square foot a year in the fourth quarter last year, the average rent for a prime shop was well above second-placed New York, where rents were 46 per cent lower at US$2,970. London came in third at US$1,080 per sq ft.
Rents in Hong Kong edged up US$1 per sq ft from the third quarter "to defy a deceleration in retail sales due to the current global economic uncertainty", CBRE said. The figures mean retailers in Hong Kong are paying HK$2,800 per sq ft per month on average for a prime retail spot.
The city's rents were driven to record highs due to the influx of wealthy mainland tourists, the expansion of luxury retailers and a shortage of prime space, CBRE said.
But it warned that many retailers had become less aggressive with their expansions or entry plans given the high rents.
"Local retailers, who are not primarily targeting tourists, cannot afford the increasing rents and in some cases are forced to relocate, which is resulting in less choice in prime districts," Joe Lin, CBRE's senior director of retail in Hong Kong, said.
Local retailers, who are not primarily targeting tourists, cannot afford the increasing rents and in some cases are forced to relocate