Not only is Hong Kong is one of Asia’s most mature retail markets, but is also one of its most thriving. Thanks to robust tourism spending, driven by deep-pocketed Mainland Chinese, low unemployment and strong wage growth, retail sales have continued to skyrocket. Heavily frequented by Mainland tourists, Hong Kong is attracting a greater array of international brands who see the market as a gateway to China and a platform for establishing their brand identity.
Hong Kong high street space has among the highest achievable rents in the world due to sustained high demand and limited new supply. Much of the high street space is occupied by luxury brands including watch and jewelry stores.
All despite record high rents, retailers are continuing to target core shopping centers and high street shops as their new locations and flagship stores.
Foreign companies face no restrictions when renting or purchasing property in Hong Kong, so both new retailers and investors must levy the advantages and costs of both options.
Leases are generally for three-five years, often longer for anchor tenants, providing for significant flexibility. Rents and service charges are paid monthly and tenants are also levied government rates (tax) on a quarterly basis. Rent review provisions are available on longer leases.
One of the biggest obstacles facing tenants in Hong Kong are occupancy costs and supply constraints. While retailers are often willing to pay high rents, they have a difficult time finding suitable locations.
It often takes retailers up to two years to locate, negotiate leasing terms and fit-out new premises.
Located to the north of Tsim Sha Tsui, Mongkok is known for being Hong Kong’s electronics market. In recent years, mid-end fashion brands and accessories and cosmetic retailers have made the area highly popular among Hong Kong’s fashion conscious youth. Mainland tourists frequent the area to purchase electronics and visit nearby attractions including Temple Street, and Ladies’ and Flower markets. Notable shopping centres in Mongkok include Langham Place.
Encompassing Hong Kong’s business and financial district, Central has a wide array of high street shops housing numerous luxury brands in addition to mid to high-end and mass market fashion brands. Watch and jewellery stores are popular along Queen’s Road Central, where there is also a large Marks & Spencer, Gap, H&M and Abercrombie & Fitch. Several popular shopping centres are located in Greater Central: IFC Mall, The Landmark and Pacific Place.
TSIM SHA TSUI
Along with Causeway Bay, Tsim Sha Tsui is immensely popular among Mainland Chinese shoppers as well as locals. Harbour City, Hong Kong’s largest prime shopping centre is located here and targets a wide range of consumers. Harbour City has a number of luxury brand shops located along the west side of Canton Road. Boutique shops, watch and jewellery stores and mid to high-end fashion outlets can also be found along Canton Road.
Only several hundred metres in length and located adjacent to Times Square in Causeway Bay, Russell Street commanded the highest street shop rents globally in 2012. It has a high concentration of international luxury brands and watch and jewellery retailers. The area attracts a high number of big spending tourists which has led to fierce competition for real estate and sharply increasing rents over the past several years.
Canton Road is the busiest prime retail street on the Kowloon Peninsula. It spans roughly 500 metres, running from Salisbury Road in the south to Gateway Boulevard in the north. Canton Road has a growing collection of luxury flagships and watch and jewellery stores. With numerous four and five-star hotels in the vicinity, Canton Road is extremely popular among tourists, notably weathly Mainland Chinese.
Central/Queen’s Road Central
Comprising the central business district of Hong Kong, Central is surrounded by Grade A office buildings that are home to multinational headquarters. Queen’s Road Central runs east to west through core Central, where a large number of luxury flagships and watch and jewellery stores locate in the ground floor spaces of commercial buildings. Other distinct retail areas and streets in the immediate vicinity include Pedder Street and Chater Road, and also the F&B and nightlife area of Lan Kwai Fong.
CAUSEWAY BAYBeing one of the region’s most prominent retail markets, more often than not the Causeway Bay is Hong Kong’s most recognized and frequented shopping destination. It’s the locale of the renowned Times Square shopping centre and Sogo department store. Outside of several large shopping centers, the area is lined with street shops of luxury brands, watch and jewelry shops, and fashion and cosmetic shops. Russell Street in Causeway Bay has the highest high street shop rents in Hong Kong. Burberry has opened another high street shop here in 2012. Prada has opened their ninth store in Hong Kong on Russell Street which previously occupied by Citibank and SaSa.
TIMES SQUARESituated at Russell Street, the world’s most expensive street shop location, Times Square is a retail landmark in Causeway Bay. It provides more than 900,000 sf. of retail floor area and targets a wide range of consumers. It houses everything from mass-market to high-end and luxury brands. The Cinema has been relocated to the upper floor and reduced F&B offerings to free up an additional 20,000 sf. on the ground floor for more luxury retail shops on Russell Street. Times Square enjoys direct underground access to the Causeway Bay metro station and is a major stop along the Hong Kong-Shenzhen Bay Bus Route.
IFC MALLIFC Mall comprise the retail portion of the International Finance Centre complex, which also includes two prime office blocks, the Four Seasons Hotel, and Four Seasons Place apartments. IFC Mall attracts affluent locals, professionals and expats working and living on Hong Kong Island, as well as international tourists. The 800,000 sf. retail space provides a comprehensive mix of fast-fashion and luxury brands, from Zara to Bvlgari and Apple to Vertu. It is situated at the top of Hong Kong MTR Station which is just 28 minutes from the airport via the Airport Express line.
THE LANDMARKThe Landmark comprises a shopping centre and retail podium of six office buildings in core Central. Its prestigious brand mix attracts well-heeled shoppers including both deep-pocketed tourists and affluent locals. The Landmark has more than 180 retail stores, one of which includes Louis Vuitton on Pedder Street, one of the iconic brand’s largest flagships in the world.
HARBOUR CITYThe long-established shopping centre is Hong Kong’s largest, providing over 2 million sf. of retail area in core Tsim Sha Tsui. Harbour City’s street front luxury flagships have made Canton Road an increasingly popular and recongnized retail destination. Shoppers are frequently seen queing along the luxury store fronts waiting to snap up the latest designer handbags and fashions. The shopping centre houses the most comprehensive offering of international brands in Hong Kong and targets a vast range of consumers over its sprawling area.
HYSAN PLACEOpen since mid-2012, Hysan Place is Hong Kong’s newest shopping centre within the traditional prime retail districts. It is located at the heart of Causeway Bay along Hennessy Road and provides over 270,000 sf. of retail floor area. It primarily targets younger shoppers by housing international fashion brands including Gap and Hollister. Other major tenants include T-Galleria, the first Eslite Bookstore in Hong Kong which spans three floors, and Apple store which is currently the largest in Hong Kong.
|SHOPPING CENTER TO WATCH OUT FOR|
|Total Size (Sq.m)||25,128 (Retail + Office)|
|Planned Opening Date||Q3 2015|
|Consumer Profile||Trend seekers, young executive, leisure and lifestyle shoppers and international tourists.|
|Description||Grade A retail and office complex towering high at the thriving heart of Causeway Bay- the fashion, lifestyle and F&B hub with the mix of mid to high range brands.|
|KEY AREAS / STREETS/SHOPPING CENTERS||CONSUMER PROFILE||MAJOR RETAILERS PRESENT||NEW ENTRANTS||TYPICAL RENT FOR UNIT OF 2,000SQFT||RANGE OF UNIT SIZES|
|Causeway Bay Times Square/ Russell Street||Hong Kong’s busiest retail district. Popular with locals and Mainland tourists. Mid to high-end brands, jewellery||Zara, Salvatore Ferragamo, Lane Crawford, Omega, Chow Tai Fook, Swarovski, Gucci, Emperor Watch & Jewellery||Apple, Hollister, Eslite Bookstore, Gap, UGG, Burberry, Prada, Tiffany & Co, Suning Electronic||HK$ 2,000,000 per month||100 - 10,0000 SF|
|Central The Landmark/ Queen’s Road Central||Wealthy locals, expats and professionals. Luxury brands intermixed with mass-market brands and jewellery shops||Cartier, Louis Vuitton, Gucci, Dunhill, Coach, Marks & Spencer, H&M, Gap, Chow Tai Fook, Rolex, Chanel, Armani, Tiffany & Co., Coach, MCM, Longchamp, Rolex, Omega||Hugo Boss, Topshop, Abercrombie & Fitch, Brunello Cucinelli, Zara, Mercedes-Benz||HK$ 2,000,000 per month||100 - 10,000 SF|
|Tsim Sha Tsui Harbour City/ Canton Road||Popular among tourists and locals. Diverse offering of mid to high-end and luxury brands||Chanel, Dolce & Gabbana, Hermes, Coach, Chow Sang Sang, Prince Jewellery & Watch, Chow Tai Fook¸ Van Cleef & Arpels,||Gap, Apple, Hugo Boss, Folli Follie, Ports 1961, Fila, Lao Feng Xiang||HK$ 2,500,000 per month||100 - 10,000 SF|
|Mongkok Sai Yeung Choi Street||Fashion conscious youth, locals and Mainland shoppers. Electronics, mid-end fashion, accessories and cosmetic retailers||Broadway & Fortress electronics retailers, Giordano, I.T, Bossini, Chow Tai Fook, Laneige||Gap, Esprit, Agnes B, Crocs, Lao Feng Xiang,||HK$ 1,800,000 per month||50 - 10,000 SF|
Data as of June 2015
Hong Kong, known as “The Food Paradise,” has many new restaurants, ranging from family operated to international chains which are being awarded a Michelin star rating.
F&B operators are continuing to reap strong revenues stemming from local consumption growth and accelerating tourist arrivals, in particular those from Mainland China.
Despite the rise in rental all over the territory, new brands and concepts are still eager to enter the market. Big Fernand- the burger restaurant from France set up their store at IFC mall. Jamie’s Italian- opened by English celebrity chef Jamie Oliver launched their 1st outlet in Mid-town, Causeway Bay. Followed by their 2nd restaurant in Harbour City, Tsim Sha Tsui. Bread Street Kitchen & Bar established by world-renowned chef, Gordon Ramsay has opened in LKF Hotel, Central.The well-known Japanese tearoom Nakamura Tokichi has chosen Hong Kong for its first oversea branch at the One, Tsim Sha Tsui.
|KEY AREAS||CONSUMER PROFILE||FOOD & BEVERAGE OPERATOR INCLUDING||RENT FOR 3,500 SQFT UNIT|
|Causeway Bay||Longstanding entertainment area. Fashionable district of upmarket restaurants, offices and hotels.||Mango Tree, West Villa, Lawry’s The Prime Rib, Kaya Korean Restaurant, Jamie’s Italian||$6.00-$17.50 psm|
|Central||Commercial lunches catering for office workers and leisure dining during evening time.||Joel Robuchon Cuisine, Yung Kee Restaurant, Inagiku Grande, Isola, Bread Street Kitchen & Bar||$5.50-$14.00 psm|
|Mongkok||Mix of both local customers and tourists as well serving a wide range of choices from Food Stall to mid-end and upmarket restaurants with the most lengthy business hours in town.||Tim Ho Wan, Fung Shing Restaurant, Garden Restaurant, Wing Hap Lung||$4.50-$13.00 psm|
|Tsim Sha Tsui||Traditional shopping and dining area with a composition of commercial elements, tourists and residents.||Palace Restaurant, Arirang Korean Restaurant, Fook Lam Moon, Spoon by Alain Ducassse, Nakamura Tokichi||$6.50-$15.50 psm|
Data as of June 2015. Photos / Fotografgruppen.se, Ray Devlin, and Flickr users maltman23 and @oohoo
Hong Kong Contacts
Michele WooExecutive Director, Head of Retail
Mobile: +(852) 9467 7852
Direct: +(852) 2956 7073
Tel: +(852) 2956 3888
Fax: +(852) 2956 2323