Hong Kong shopping centre rents on the rise as good sales prospects draw retailers
An increase in the number of visitors from mainland China has lifted sales at malls, making them more attractive locations for store owners
Rents at some Hong Kong shopping centres have climbed to as high as HK$1,000 (US$128) per square foot as improving sales at the city’s malls increase their attraction as a location for retailers.
In a stark contrast to the rising number of empty street-level shops in the city’s main tourist areas, shopping centres are seeing increased numbers of retailers seeking space, drawn by rising numbers of shoppers.
Market watchers noted that Sunglass Hut recently opened its first 600 sq ft store at the IFC Mall in Central at a monthly rent of HK$1,000 per square foot.
“Retailers will go wherever they can make a profit,” said Kevin Lam, executive director and head of business space, retail and office services at Cushman & Wakefield. He added that shopping centre operators provide a good trade mix and often launch aggressive promotions to help boost tenants’ sales.
In a survey conducted by JLL in the third quarter, 82 per cent of the 22 retail landlords and developers in Hong Kong saw a gain in sales, while 91 per cent believed the market would continue to improve next year.
“Much of the increase in retail sales has been related to the resurgence of mainland Chinese visitors coming to Hong Kong for vacations and shopping trips,” said James Assersohn, director of the retail department for the Asia-Pacific at JLL.
This was in part due to a large diversion of tourists from South Korea after a political dispute saw China ban travel agencies from selling package tours to South Korea, and in part due to perceived terrorism risks in Europe.