Activity in Hong Kong’s retail leasing market is strong despite lukewarm retail sales, as companies take advantage of rents that are relatively low – and set to fall further, according to some experts – to move into larger premises or better locations.
“The retail market has shown a mixed picture, where we see some business owners from [food and beverage] and clothing shops worrying about their sales during the Easter Holiday, yet leasing activity in the core retail districts remains very active,” said Jeannette Chan, senior director of retail at JLL Hong Kong.
Leasing momentum was particularly strong in mass-market segments, but “retail rents continued to dip as landlords in general offered discounts to attract and retain tenants amid sales headwinds”, Chan added.
Total retail sales during January and February fell 7.8 per cent year on year, steeper than the 6.6 per cent drop in the fourth quarter, according to JLL’s latest report published on Thursday. A sales decline hit most major retail categories, it said. “Jewellery, watches and clocks, and valuable gifts plunged by 15.8 per cent, compared to 10.4 per cent last quarter,” JLL said.
During the Easter long weekend, retail sales suffered as Hongkongers left the city in droves, with 1.3 million departures by residents and only 234,090 visitor arrivals recorded on April 17 and 18, according to official data.
Departures by locals rose 31.4 per cent from pre-pandemic figures in 2018 and 8.4 per cent over the Easter holiday last year. The arrival numbers were 20.4 per cent lower than in 2018 and 15.2 per cent higher than last year.
