Since normal travel between Hong Kong and the mainland resumed, retail sales in Hong Kong have rebounded strongly, while rents stay unchanged.
Photo from CFP
By ZHU Yongling
Since travel arrangements between Hong Kong and the Chinese mainland returned to normal, retail sales in Hong Kong have rebounded strongly. In the first five months, sales were up 21 percent year on year.
Jewelry and watches did best, up by more than three quarters, followed by clothing, up by more than a half. Medicine and cosmetic sales were up by more than a third.
Of the ten biggest retail leases signed this year, six are pharmacy chains and three are luxurious jewelry or watch brands. Real-estate agency Cushman & Wakefield said that since all travel restrictions were lifted in February, most of the stores that had entered the city center were pharmacies.
Despite the growth, rents remain steady, up by only 2.4 percent. However, the average rate in Tsim Sha Tsui, the costliest area, is HK$872 per square foot (8,500 yuan per square meter) with occupancy around 87 percent. Five years ago, the rent was HK$1,635, and the place was 99 percent full.
The new business environment possibly contributes to stagnating rents.
Hong Kong may once have seemed distant, aspirational and exotic to mainlanders, but the mainland itself is now a shoppers' paradise, where everyone speaks your language and prices are in yuan. The duty-free tropical beach paradise of Sanya on the island of Hainan offers very serious competition to Hong Kong.
In 2020, luxury brands from Prada and Victoria’s Secret to Tissot and Omega closed their stores in Russell St., once most expensive shopping area in the world, as did LV and Fendi in 2021 in Causeway Bay Time Square, causing rents to crash by 43 percent.