International retailers show great interest in Hong Kong market
International brands of non-luxury products are keen to enter the Hong Kong market despite the city suffering from a decline in retail sales.
Foreign retailers catering to Hong Kong's mass retail market are eager to secure shops in Hong Kong, which they consider as a mature market, said Maureen Fung Sau-yim, a director of Sun Hung Kai Development (China), a unit of Sun Hung Kai Properties.
According to Fung, the company has signed leasing contracts with 20 new international tenants this year at its APM shopping centre in Kwun Tong.
"Those brands, such as French shoe brands Bensimon and Palladium, as well as Korean fashion brand Stylenanda, have come to Hong Kong for the first time," said Fung.
She said recently agreed rents in APM had risen 16 per cent to 20 per cent compared to leases signed one to three years ago.
Total retail sales growth declined 1.8 per cent year on year in the first five months of this year, against average growth of 11 per cent per year over the past 10 years, constrained by weaker inbound tourism.
Spending on jewellery and watches continued to fall, affected by the anti-corruption campaign in mainland China and the shifting pattern of mainland Chinese shoppers away from luxury goods and towards mass market products, according to property consultant JLL.
But a survey by consultancy Arcadis showed that Hong Kong was still an attractive place for retailers.
In its first report "Retail Operations Index: Where in the world could your retail portfolio thrive?" on Monday, Arcadis said Hong Kong was the most attractive location for retailers globally, followed by Singapore, US and Japan.
Asian countries dominated, taking three of the top five spots, the survey showed. It identified the locations that were the most and least difficult to execute, scale and flex large retail programmes based on an in-depth analysis of the global retail market in 50 countries.
SHKP plans to spend HK$150 million to upgrade the APM mall, which was established 10 years ago.
The programme, which is due for completion in 2017, includes an upgrade of technology, common and leisure areas and other facilities.