Hong Kong to see the highest annual retail supply in 20 years

Nearly 4 million sq ft of new supply is expected to come online this year.

Colliers forecasts high street rents in Hong Kong to grow by 8% this year amidst HK-China border reopening. The recovery will be more notable in H2 2023 whilst we monitor the number of inbound tourists upon border reopening in January. 

On the other hand, neighbourhood districts will continue to grow steadily in the strong local consumption demand.

Here’s more from Colliers:

There will be approx. 3.9 million sq. ft. (360,000 sqm ) of new retail supply in 2023. This would be the highest single year supply by volume within the last 20 years, and most of the supply will be in newly developed areas of Hong Kong. These will create a more diversified shopping experience for consumers.

Shopping mall developers will continue to run loyalty programmes, promotions and festive events to attract footfall. Fresh trade mix will be leveraged to drive and support overall sales performance. For high streets, landlords are more inclined to sign new leases with reputable and larger operators over a permanent lease term (than pop up tenure). 

Despite border reopening on 8th January, we believe local consumption will remain as an important driver for the Hong Kong retail market in the next 12 months. Premium lifestyle & accessories, health-related trades as well as the family entertainment sector will continue to expand. Subject to the positive resumption of border traffic, luxury goods and cosmetics will also pick up gradually. 

The shifted shopping pattern of the Mainlanders over the last three years may paint a new picture to the new retail market sentiment. Hence, we will keep an eye on how Mainlanders may shop and spend in Hong Kong upon border reopening.