Hong Kong retail space supply won’t rise until 2023

There are only three projects slated for completion this year.

The retail property market in Hong Kong will remain low in new supply will remain low this year as Savills says there are only three projects scheduled for completion. This pipeline includes Nan Fung’s AIRSIDE in Kai Tak, the Hopewell Mall Extension in Wan Chai and Sun Hung Kai Properties’ development at Yuen Long Station, providing a total of just over 1 million sq ft GFA of new retail supply. 

“The supply pipeline is expected to increase in 2023 in both urban and suburban locations, and key projects will include Sogo’s Twin Towers in Kai Tak, MTR malls in Tai Wai and Wong Chuk Hang and the first phase of 11 Skies at the airport,” the analyst said.

Here’s more from Savills:

The retail market is expected to continue to focus on local consumption in 1H/2022 and leasing activity will remain subdued. 

There is hope that land checkpoints may reopen in 2H/2022 which would help retail businesses especially in the New Territories submarket. 

We expect that 2022 will be very similar to 2021, but there is some concern that local consumers may show signs of fatigue at local offerings. 

The recovery pattern beyond 2022 may look similar to the period after SARS when the Individual Visitor Scheme (IVS) was introduced, with a strong multiyear return of mainland visitors.