High street shop rents in Hong Kong down 2.4% in H1

The retail rental recovery for 2022 is expected to be within 5%. 

The retail market has been one of the hardest hit as Hong Kong faced the fifth wave outbreak early this year. Data from Colliers reveal core high street shop rents adjusted downward in Q2 by 0.4% QoQ, resulting in a -2.4% YTD rental drop in H1 2022. While most retailers remain cautious, banking and international apparel operators are also taking the opportunity to relocate to first-tier high streets.

According to Colliers, local consumption will remain the key purchasing power with more F&B brands expected to enter the market along with supermarkets, home living and leisure, which will all remain as key leasing demand drivers. Shopping mall landlords will continue to enhance customer loyalty programs and leverage high-profile brand ambassadors to drive retail sales and footfalls.

“Looking ahead, we are sanguine over the market sentiment for H2 2022. The upcoming consumption voucher distribution (Phase II) in August and the likelihood that the city’s rules for incoming travellers to be further relaxed may support the retail ambience in H2 2022. Subject to no further serious pandemic outbreaks in the remainder of 2022, we expect the full year’s retail rental recovery could be within 5% in 2022,” said Cynthia Ng, Head of Retail Services at Colliers Hong Kong.