Modest Rise in Hong Kong Retail Rents But Sales Still Slow
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Despite the challenges facing Hong Kong’s retail market, a steady increase in visitor numbers has led to a modest recovery in street-front shop rents in some districts.
Real estate service provider Cushman & Wakefield predicted rents for retail shops will see a slight increase in the second half of 2024, with a less-than-5% hike.
In the second quarter, the vacancy rate of street-front shops in the popular tourist center Tsim Sha Tsui district decreased by 1.2 percentage points to 10.6%, driven by higher tourist numbers. Meanwhile, vacancy rates in Central, Causeway Bay, and Mong Kok remained stable year-on-year at 7%, 2.6% and 11.1%, respectively, according to the Cushman & Wakefield report.
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- Retail rents in Hong Kong saw modest increases in Q2 2024; Causeway Bay up 0.5%, Mong Kok 1.6%, Central 2.7%, and Tsim Sha Tsui 2.8%.
- Hong Kong’s total retail sales dropped by 11.5% year-on-year in May, with declines in sectors like jewelry (-21.4%) and apparel (-18.8%).
- Outbound travel surged, with 49.5 million residents traveling abroad in the first half of the year, exacerbating weak local consumption.
- Cushman & Wakefield
- Cushman & Wakefield is a real estate service provider mentioned in the article. They predict retail shop rents in Hong Kong will see a slight increase, less than 5%, in the second half of 2024. Their report highlights vacancy rates and modest rent increases in key districts like Tsim Sha Tsui and Central. Kevin Lam, an executive director at Cushman & Wakefield Hong Kong, provides insights into the retail market trends and pressures from outbound travel and weak local consumption.
- The first half of 2024：
- 49.5 million Hong Kong residents traveled abroad while inbound tourists were about 21 million, resulting in a net outflow of 28 million, an 80% increase from the same period in 2023.
- May 2024：
- Hong Kong’s total retail sales were estimated at HK$30.5 billion, down 11.5% year-on-year, marking the third consecutive month of decline.
- May 2024：
- Sales of jewelry, watches and luxury gifts plummeted by 21.4% year-on-year.
- May 2024：
- Sales of supermarket goods and clothing fell by 21.1% and 18.8% respectively.
- May 2024：
- Sales of big-ticket items such as cars and auto parts experienced a 29.8% drop.
- May 2024：
- Sales of pharmaceuticals and cosmetics, as well as appliances and other consumer durables, rose slightly by 2.5% and 2.2%.
- The second quarter of 2024：
- The vacancy rate of street-front shops in Tsim Sha Tsui district decreased by 1.2 percentage points to 10.6%.
- The second quarter of 2024：
- Vacancy rates in Central, Causeway Bay, and Mong Kok remained stable year-on-year at 7%, 2.6%, and 11.1%, respectively.
- The second quarter of 2024：
- Causeway Bay and Mong Kok saw retail rent rises of 0.5% and 1.6%, while Central and Tsim Sha Tsui experienced increases of 2.7% and 2.8%, respectively.
- By the second half of 2024：
- Cushman & Wakefield predicted rents for retail shops to see a slight increase with a less-than-5% hike.
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