Hongkong Shops Rents Continue To Fall Opportunities?

Shops rents in Hongkong's core retail area continued to fall, but in the more crowded shopping malls, the rental performance was relatively stable.

The retail market in Hongkong is in a bad mood. Rating agencies and real estate consultants are not optimistic about retail rents, but believe that the rent starts to slow down.

According to reports, the rating agency Fitch said that the consumption pattern of mainland visitors has changed. It is estimated that the retail market in Hongkong will continue to be weak in 2016, and the number of local consumption will only increase.

Fitch pointed out that between 2013 and 2014, luxury consumption accounted for about 24% of the total retail sales of the country, and by the end of September this year, it had dropped to 18%.

The rating agency mentioned that the core rentals' rents continued to fall, but in the more crowded shopping malls, the rent performance was relatively stable and strong.

The report said that the weakness of luxury sales in Hongkong and the significant decline in core rentals led to pressure on luxury retailers, which needed to be re examined.

It includes seeking rent reduction.

The bank expects the rent reduction of the first tier street shops, which will set a new benchmark for the lease negotiations in the coming months.

Although Hongkong's retail market is weak, CB Richard Ellis believes that Hongkong is still an important market for international luxury brands, and believes that the new international brand will continue to seek entry and settlement.

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In addition, CB Richard Ellis published earlier.

The future of Luxury Retailing: new demands for demand and changes in tenant needs "reveals that Luxury Retailing in the Asia Pacific region is experiencing a slowdown.

The report pointed out that in 2014, Asia Pacific accounted for three of the world's personal luxury sales, of which mainland China and Hongkong were the highest penetration markets for luxury goods retailers in the Asia Pacific region, up to 89% and 81% respectively.

However, after several years of rapid expansion, the luxury retail market in mainland China and Hongkong is nearly saturated.