Here are some key retail leasing transactions in Hong Kong recently

One brand will lease over 3,600sq ft of space for HK$600,000 monthly.

According to a Knight Frank report, Hong Kong’s retail sales remained weak, with total retail sales in March slumping significantly by 7% YoY to HK$31.2 billion, the worst performance in two years. 

Sales value of clothing, footwear and allied products dropped by 16.7% YoY to HK$3.69 billion, and sales of jewellery, watches and clocks, and valuable gifts recorded a 17.7% YoY decline to HK$4.18 billion. In Q1 2024, total retail sales decreased by 1.3% YoY. 

Here’s more from Knight Frank:

On a positive note, leasing activity has shown stronger momentum in prime retail streets recently. On, a Swiss performance running shoe brand, will debut in Hong Kong by launching its first flagship store on G/F, Shop 2, in H Queen’s, Central. The store will comprise over 3,684 sq ft, for a monthly rent of HK$600,000. 

Other leasing transactions included a 1,700 sq ft shop in Parker House, Central, leased by Falconeri at HK$400,000 per month; and a 1,700 sq ft shop in Pacific House, leased by Nike, also at HK$400,000 per month. 

Despite more retail leasing transactions in prime retail streets, rents continued to face downward pressure as retail sales dipped further. As for retail investment, sales transactions have been impeded by the lack of rental growth potential and shop owners’ reluctance to lower prices in the hope of maintaining an attractive rental yield. 

Regarding the food and beverage sector, total restaurant receipts in Q1 2024 rose slightly by 2.3% YoY to HK$28.2 billion; and fast-food shops showed relatively steady growth in Q1 2024 with a 3.4% QoQ increase and a 5.8% YoY increase. 

Total receipt value from bars in Q1 2024, in contrast, plunged significantly by 33% QoQ and 17% lower than in Q1 2023 when the borders were not fully opened until February, reflecting the challenging business environment for bar operators. 

Many retailers responded that sales were disappointing in Golden Week 2024. Lower visitor spending patterns, the weak Chinese yuan, and China’s slow economic rebound all pose challenges to Hong Kong’s tourism recovery. As market headwinds prevail, retailers and operators have underlined the severity of the business downturn, forcing them to slow down their expansion plans in 2024.