How Hong Kong’s tourist footfall unlocks prime space for local brands

A local brand recently leased a 1,100sq ft unit on Nathan Road in Tsim Sha Tsui.

Hong Kong’s retail sector continued its recovery in January, with sales value rising 5.5% year-on-year, marking nine consecutive months of growth, according to Knight Frank.

The consultancy highlighted strong performance in tourist-driven categories, with sales of jewellery, watches, clocks and valuable gifts surging 31.1%. Momentum is expected to strengthen further, supported by increased visitor arrivals during the Chinese New Year period. A total of 1.77 million tourists visited Hong Kong over the holidays, up 14% year-on-year, with 1.5 million coming from mainland China, Knight Frank noted.

Tourism demand is also shaping leasing activity. Knight Frank cited Cookies Quartet’s recent lease of a 1,100 sq ft unit on Nathan Road in Tsim Sha Tsui at approximately HK$300,000 per month, demonstrating how local brands are leveraging visitor footfall to secure prime retail space. This comes despite an 18.1% year-on-year decline in sales of bread, pastry, confectionery and biscuits in January.

However, Knight Frank cautioned that domestic consumption remains subdued, with closures across food and beverage and apparel operators reflecting a cautious near-term outlook for expansion.

Looking ahead, Knight Frank said external uncertainties, including developments in the Middle East, may influence inbound tourism. At the same time, reduced outbound travel by local residents or a shift դեպի shorter trips could help sustain retail spending within Hong Kong.