Hong Kong retail market faces two-speed recovery in 2026

Prime street shop rents may increase as neighbourhood centre rents slide.

Hong Kong’s retail market is undergoing a significant structural transformation, with e‑commerce growth and cross-border spending reshaping consumer behaviour, according to Knight Frank.

Helen Mak, Senior Director and Head of Retail Services at Knight Frank, said, “From 2021 to 2024, local online sales consistently exceeded HK$30 billion annually, up from HK$20.6 billion in 2020. By the end of 2025, online sales are projected to reach HK$35 billion, highlighting the growing dominance of e‑commerce in Hong Kong’s retail landscape.”

Credit card spending trends further illustrate this shift. Mak noted that credit card transactions surged from HK$591 billion in 2020 to HK$1,023 billion in 2024, with HK$801 billion recorded in the first three quarters of 2025. She added, “Overseas spending accounted for 34.1% in the first three quarters of 2025, meaning more than one-third of card spending is now taking place abroad. This reflects both the rebound in travel and increasing consumer comfort with online shopping.”

Despite local retail sales in 2024 lagging behind 2023, Mak said that when factoring in overseas and northbound spending, domestic demand remains relatively resilient.

Looking ahead, Knight Frank forecasts a bifurcation in rental performance by 2026. Mak explained, “Prime street shop rents are projected to rise 5–10%, fuelled by recovering luxury sales and new brands’ preference for high-visibility locations. Conversely, neighbourhood centre rents may fall by up to 5%, impacted by e-commerce growth and increased northbound spending, which affects community tenants more severely.”

Mak concluded that retailers and landlords will need to adapt to this evolving market, balancing high-street visibility with digital strategies, while closely monitoring consumer trends driven by cross-border and online spending.