Hong Kong sees improved retail property sales transactions 

A retail unit was recently sold for HK$370m.

Buoyed by the revival in tourist arrivals and the improved labour market, Hong Kong’s retail market remained stable. According to a Knight Frank report, total retail sales value in July increased by 16.5% YoY to HK$33 billion, marking the eighth consecutive month of growth. 

However, as the market lacks momentum to significantly raise the retail sales value, the total retail sales value in July was still below market expectations of 18%. 

Here’s more from Knight Frank:

The fact that more residents travelled to the Chinese mainland than inbound tourists is rubbing salt into the wounds of the retail market. According to the Immigration Department, there were 5,321,566 man-trips by Hong Kong residents to the Mainland in August, increasing by 6.4% MoM. 

According to a government announcement, the night-time economy initiative will include extending the operating hours of shopping malls and retail shops on weekends, and organising special events, like the Wine and Dine Festival and the New Year Countdown Celebrations. Retailers and shopping mall operators in Hong Kong are pinning their hopes on the night-time economy to stimulate local spending sentiment and help revive the local retail market. 

On the bright side, we saw improved activity in retail property sales transactions. For instance, a 7,363-sq-ft retail unit, including the ground floor and basement, in Cheong K Building, at 84-86 Des Voeux Road Central, was sold for HK$370 million (or HK$50,251 per sq ft). 

On the leasing front, a retail brand specialising in exquisite goldsmith art pieces from Beijing, Lao Pu, is going to open its first flagship store in Hong Kong. It recently leased a 10,140-sq-ft retail unit in Silvercord, in Tsim Sha Tsui, for approximately HK$1.5 million per month (or HK$148 per sq ft). 

Airside, a new shopping mall in Kai Tak, by Nan Fung, had its grand opening in September. The mall houses more than 40 restaurants and a 6,000- sq-ft urban farm, adding 700,000 sq ft of retail space to the market. 

Overall, we expect retail sales to remain stable in the short term amid the recovery in tourism and local consumption. The retail sector is still battling with unprecedented challenges, however, as it is still seeking a new identity amid keen competition from shopping malls in the Chinese mainland.