Hong Kong high-street rents finally recover from longest-ever downcycle: CBRE

Rents grew 2.9% in Q3, the fastest growth rate since 2012.

High-street shop vacancy in Hong Kong fell 1.8 percentage points quarter-on-quarter to 14.4% in Q3 2022 amid improved leasing sentiment, according to a CBRE report.

Retailers turned more active in the leasing market in anticipation of a rise in inbound visitors. 

Here’s more from CBRE:

Causeway Bay vacancy fell by 2.6 percentage points quarter-on-quarter to 9.2%, the first time it has been in single-digits since Q1 2020. Vacancy in Tsim Sha Tsui and Mong Kok also fell by 1.4 percentage points and 2.3 percentage points to 21.7% and 16.6% respectively.

High-street rents showed signs of recovering from their longest-ever downcycle, with this quarter’s 2.9% quarter-on-quarter growth across core districts marking the fastest increase since Q1 2012.

F&B remained a key sector driving leasing demand in Q3 2022. 

Lawrence Wan, Senior Director, Advisory & Transaction Services – Retail, CBRE Hong Kong: “The easing quarantine requirements, improving labour market conditions, and the government’s consumption voucher scheme have boosted consumption sentiment, and local residents are generally feeling more relaxed and optimistic. Retail market sentiment continues to gradually recover.  Retailers are already planning ahead for the festive season and the rebounding tourist arrivals in the fourth quarter. Vacancy is set to edge down further, possibly supporting mild rental growth for the remainder of the year. The higher household burden stemming from interest rate hikes and the growing intention for outbound travel, however, will prevent local consumption from experiencing a sharp rebound.”