Luxury retailers drive renewed confidence in Hong Kong retail market

Learn more about key leasing transactions in the high-end luxury segment.

Hong Kong's retail sector continued its recovery in March, with retail sales rising 12.8% year-on-year and extending the market's growth streak to 11 consecutive months, according to Knight Frank.

The strongest gains came from motor vehicle sales, which surged 80.8% ahead of the expiry of electric vehicle tax concessions, while jewellery and luxury gift sales increased 27.2%.

Knight Frank said improving sentiment is also evident in the leasing market. Emperor Watch & Jewellery recently leased a 700 sq ft ground-floor unit at 16 Canton Road for approximately HK$550,000 per month, while Chow Tai Fook has returned to the high street with a 10,000 sq ft flagship store at a reported monthly rent of around HK$2 million.

The consultancy expects luxury retail, particularly gold-related products, to outperform on the back of sustained local and mainland Chinese demand. However, price-sensitive retailers are likely to accelerate their shift towards online channels as operating costs rise.

Knight Frank noted that visitor preferences are increasingly centred on cultural and experiential activities rather than traditional shopping, prompting retailers to become more selective in their expansion plans. Prime street retail locations and leading shopping malls are expected to remain the strongest-performing segments of the market.