Concrete Analysis | New retail districts a welcome trend but challenges remain

Hong Kong has long had its well-established retail districts serving different catchments and budgets, each one offering a slightly different balance of retailers and slightly different price points.

The increasing dominance of mainland tourists as the pre-eminent source of demand in recent years, however, has morphed these areas into high-end fashion, watch and jewellery emporiums with some inevitable loss of local character. Rents have also reached stratospheric levels, increasingly beyond the reach of many local operators.

At the same time, as retailers have begun to feel squeezed by rising costs in traditional districts, new opportunities have presented themselves elsewhere.

The word "retail" comes from the French word tailler, "to cut off or divide", which eventually came to mean the sale of small quantities of things. The same could be said of retail areas as new, smaller, more walkable retail communities have begun to emerge distinct from established precincts, much more in tune with local neighbourhoods.

Transformation has come about for a variety of reasons. New transport infrastructure such as the MTR line is already transforming Kennedy Town alongside an accompanying swathe of new residential developments (almost 1,000 upmarket units), some of which are selling for more than HK$30,000 per square foot.

This means gentrification on quite a large scale for what is traditionally a blue-collar neighbourhood and new retail entrants look likely to extend beyond simply the current food and beverage offerings to encompass, for example, boutique and lifestyle offerings.