Prime retail outperforms as Hong Kong market becomes more polarised

Hong Kong's prime retail rents are forecast to grow by up to 10% this year.

Hong Kong's retail property market is becoming increasingly polarised as online shopping continues to reshape consumer spending and retailer demand, according to Knight Frank.

Helen Mak, Senior Director and Head of Retail Services at Knight Frank, said online retail sales increased from HK$20.6 billion in 2020 to a record HK$35.8 billion in 2025 and are expected to reach another high in 2026. The agency said the continued expansion of Chinese mainland e-commerce platforms into Hong Kong is intensifying competition for traditional retailers.

Knight Frank said rental performance continues to diverge between prime and non-core retail locations. Prime shopping centres have benefited from recovering tourism and stronger demand, with Harbour City recording average rents of HK$361 in 2025, up from HK$334 in 2021. By contrast, mid-market centres such as Plaza Hollywood have experienced weaker trading conditions, while Link REIT's community shopping centres have remained relatively stable despite a slight decline in rents during 2026.

According to Knight Frank, the market's growing divide reflects the resilience of prime retail locations while mid-tier and neighbourhood shopping centres continue to face pressure from changing consumer behaviour and online shopping.

Despite uncertainty surrounding fuel costs and tighter financial policies affecting mainland investment, Knight Frank maintained its 2026 rental forecasts, with prime street shop rents expected to increase by 5% to 10%, prime shopping mall rents to rise by up to 5%, and non-core shopping mall rents to remain flat or decline by up to 5%.