How prime retail leasing in Central Hong Kong shows resilience

Luxury spending drives Hong Kong retail recovery despite weak local demand.

Hong Kong's retail market continued its recovery in June, with sales rising 4.6% year on year following a 7.9% increase in May, marking the 14th consecutive month of growth, according to Knight Frank.

Luxury spending remained the key growth driver, with luxury sales increasing 20.1% year on year. However, growth moderated from 26.0% in May, the property consultancy said.

Local consumption remained subdued, with supermarket sales falling 1.1% year on year and department store sales declining 4.2%.

Prime retail leasing conditions in Central, meanwhile, continue to show resilience. Knight Frank highlighted the recent sale of the ground-floor shop and cockloft at 32 Cochrane Street for HK$75 million, representing a 15.7% capital gain over three years.

The property had previously achieved a monthly rent of HK$150,000, which Knight Frank said demonstrates the sustained appeal of well-located Central retail units. Brentwood Coffee's lease commitment at the location further illustrates demand from café and lifestyle operators seeking exposure to Central's office population and tourist traffic.

According to Knight Frank, the transaction and leasing activity reinforce Central's position as Hong Kong's most sought-after retail leasing destination, despite weaker consumption in some traditional retail categories.