Hong Kong high-street rents to fall by 3% this year

This is a huge improvement from the 28% drop recorded in 2020.

According to Colliers, retail sales grew by 11.2% YOY in Q2 2021 from the low base of last year, driven by the growth of sales in apparel, luxury goods and electrical goods.

“Backed by the higher vaccination rate, eased social distancing measures and the rollout of the Consumption Voucher Scheme, the worst has passed for the retail sector. We forecast full-year high-street rents to fall by 3% YOY in 2021, compared to -21% and -28% YOY recorded in 2019 and 2020, respectively,” said Cynthia Ng, Executive Director of Retail Services at Colliers.

The change in consumption pattern and attractive high-street rents offer retailers, such as lifestyle and international ath-leisure brands, discounted luxury, and creative F&B concepts, the opportunity to expand their footprints in Hong Kong. Shopping malls are also rolling out a variety of new and creative pop-up exhibitions to offer a different shopping experience to consumers.

“Amid the change in shopping behaviour, uncertain timeline over the re-opening of the borders, and the global travel restrictions remain in place, the retail sector will continue to be dependent on local consumption for at least the next one to two years. Whilst leasing demand has picked up and recovered gradually, high-street rental is anticipated to remain flat for H2 2021 as landlords look for sustainable operators,” added Ng.