Hong Kong retail undergoing more “drastic transformation”: Knight Frank

Banks are now occupying large duplex stores.

Hong Kong’s retail market remains gloomy even though concern about the coronavirus pandemic has largely subsided. According to Knight Frank, the lower retail sales in April this year indicates that local consumers were still cautious about the economic and labour market outlook.

Amid weak consumption sentiment and the absence of inbound tourism, the luxury retail sector remained challenging. Knight Frank says retail sales of luxury goods totalled HK$2.6 billion in April, the lowest in eight months. Although retailers and landlords have offered various promotions and sales campaigns since mid-2020, these are only short-term solutions to stimulate spending.

Here’s more from Knight Frank:

Reshuffling of the tenant mix on prime retail streets persists, with an even more drastic transformation, as we saw banks occupying large duplex stores.

We expect the recovery in the retail market to pre-pandemic levels to take considerable time. Given the current market fundamentals, it is difficult to expect significant growth in the local consumption segment. On the upside, however, the government aims to start registration for the consumption voucher scheme in July. Also, some property developers have offered lucky draws in a collective effort with large companies and brands to incentivise local residents to receive COVID-19 vaccination. We expect these initiatives to drive positive sentiment and offer temporary support for retail sales in the coming months.