The overall retail vacancy rate dropped to 9.6 per cent in March from 10 per cent a year ago, and is likely to hold steady over the next six months, according to the latest report by Midland IC&I. In Yuen Long, vacancy increased to 7.1 per cent from 5 per cent over the same period, and worsened from 6.4 per cent to 8.3 per cent in Sheung Shui.
The trend has persisted since last year, as noted by Cushman and Wakefield. Shopping streets and malls along the East Rail Line – which connects Lo Wu and Lok Ma Chau in the northwestern part of Hong Kong and Shenzhen – suffered as much as a 30 per cent slump in sales, the property consultancy firm added.
Some 7.8 million tourists visited Hong Kong in January and February, which was equivalent to 63 per cent of the level seen in 2019 before the Covid-19 outbreak, according to data published by the city’s tourism authority. At the same time, Hong Kong resident departures totalled 15 million in the same period, matching the flow in 2019, according to property consultancy Colliers.
There has been an “upsurge in Hong Kong people heading north for consumption,” Midland said. “Many people will go to the mainland for dining, entertainment and other leisure activities [and] to large supermarkets on the mainland to buy daily necessities. The livelihood in areas [on the Hong Kong side] near Shenzhen will be most affected.”
No Easter joy for Hong Kong retailers as trade group warns of tough times
No Easter joy for Hong Kong retailers as trade group warns of tough times
Hong Kong’s economy grew 3.2 per cent last year and could expand by 2.5 per cent to 3.5 per cent this year, according to government forecasts. Consumers have been spending more, lifting retail sales in the first two months this year to HK$70.3 billion (US$8.9 billion), a 1.4 per cent increase from the same period last year, according to the latest official data.
Return of mainland tourists lifts Hong Kong retail property segment
Return of mainland tourists lifts Hong Kong retail property segment
Puyi Optical leased two connecting shops on the ground floor of Central Building totalling 2,497 sq ft in February, among some of the larger deals in February. The firm reportedly paid HK$700,000 a month, or about 20 per cent lower than the previous lease, according to JLL.
“Overall retail market will benefit from recurring tourists drawn by the large-scale events and the expansion of the Individual Visit scheme,” said Cynthia Ng, head of retail services at Colliers Hong Kong.
The food and drinks sector is likely to experience a slowdown given the outbound travel rush, while the outlook for goldsmiths and fitness centres will remain positive, Ng said. Demand for high-street shops in core districts, is expected to prevail in the next two quarters, she added.