Slow sales drag retail property market although leasing rates “strong” | Real Estate Asia
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Slow sales drag retail property market although leasing rates “strong”

Structural change and shifts in visitors are some challenges the market may face.

Hong Kong’s retail property market continues to face challenges despite showing recent strength in leasing rates, according to a report by S&P Global Ratings.

"We are not hugely confident that this resilience will last." said Wilson Long, S&P Global Ratings credit analyst.

"The Hong Kong economy is going through a structural change with low volumes of capital market activity, a shift in the visitors coming to the city to low-spending day-trippers, and a diversion of residents to Shenzhen for spending on essentials." Ling added.

Non luxury spending has softened amidst luxury and tourist-focused properties showing vigour.

The non luxury segment makes up most of Hong Kong's retail market, and half of some landlords' rental income.

The decline in sales are attributed to buyers shopping for essentials in the neighbouring mainland Chinese city of Shenzhen.

Rental income from the retail portfolios of rated property companies in Hong Kong are assumed to rise an average of 5% this year.

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