Hong Kong high street rents adjust as retailers stay cautious

Landlords are adjusting rents to secure occupancy.

Hong Kong’s retail market showed modest growth in 2025, with total sales reaching HK$380.46 billion — a 1% year-on-year increase but still 22% below 2018 levels, according to Knight Frank. December proved a stronger month, with retail sales rising 6.6% year-on-year, buoyed by festive demand. Electrical goods led the growth with a 58.9% increase, while luxury sales expanded 14.3%. Visitor arrivals from the Chinese Mainland also contributed, rising 8.2% in December to 3.35 million people.

On the leasing front, Knight Frank highlighted continued softness in the high street market. In January 2026, Luk Fook renewed its Russell Street, Causeway Bay flagship store at a reduced monthly rent of HK$750,000 — 6% below its 2023 rent and nearly 17% under the landlord’s asking price. The 3,068 sq ft ground floor unit facing Times Square will be retained for another three years at HK$244 per sq ft.

Knight Frank noted that the discounted renewal underscores a cautious approach among retailers and reflects ongoing adjustments by landlords to secure occupancy in prime high street locations. While sales growth remains steady in certain categories, the leasing market continues to signal a measured recovery, with landlords offering incentives to maintain tenancy amid broader economic and retail uncertainties.