Retail in Asia


Hong Kong retail rallies back

Providing a temperature check on Hong Kong’s retail sector, earnings released last week by some of the city’s top landlords reflect a recovery underway for the first half of the year. 

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Beleaguered in the last three years since the pandemic’s outbreak, Hong Kong retail has begun seeing bright spots with expanded investment of major tenants in shopping districts such as Causeway Bay and Tsim Sha Tsui. On top of the long-anticipated return of tourism, the government’s consumption voucher scheme also sparked spending in the first half of 2023. 

Swire Properties’ Pacific Place mall in Admiralty. Source: Swire Pacific

Swire Pacific reported on August 10 a first-half recurring underlying profit of HKD4.9 billion (USD623.1 million), soaring 284 percent year-on-year. Though the substantial increase is attributed to the improved performance of its flagship air carrier Cathay Pacific, which announced on August 16 its traffic figures for July 2023, Swire Pacific’s property division also experienced a rise in rental income. In Hong Kong, Swire Pacific’s retail portfolio includes Pacific Place in Admiralty, Cityplaza in Taikoo Shing, and Citygate Outlets in Tung Chung. 

“This partly reflects a robust recovery in the performance of retail and hotels in Hong Kong, thanks largely to the resumption of travel in January 2023,” Swire Pacific chairman Guy Bradley said in a statement. Together with HK Express, Cathay Pacific exceeded two million passengers in a month for the first time since the Covid-19 pandemic. Cathay Pacific ferried a total of 1,744,374 passengers, marking a 693.8 percent increase compared to July 2022. 

Giorgio Armani’s flagship store in Chater House in Hong Kong’s Central district. Source: Hongkong Land

Hysan Development, which celebrates the 100th anniversary of its establishment in Hong Kong in 2023, revealed a recovery in retail sales for the half-year period ended June 30, despite the temporary closure of some of its retail areas.

The owner of commercial developments including Hysan Place, Lee Theatre, and Lee Gardens in Causeway Bay, Hysan Development reported office and retail occupancies stand at 89 percent and 98 percent, respectively, as of the end of June.

Echoing the slower recovery in office property divisions of some peers, Hysan Development said its retail sales, on the other hand, surpassed that of overall retail sales in the Hong Kong market. 

Hysan’s ongoing rejuvenation project is set to address the demand for expansion from key luxury anchor tenants at Lee Gardens, according to the company. 

“In addition to our key luxury anchor tenants’ expansion, a number of top new international brands have also committed to Lee Gardens,” said Hysan Development chairman Irene Yun-Lien Lee in a statement. “When the building works are completed, this cluster of luxury brands will showcase their latest flagship store designs and concepts, making Hysan Avenue the leading home for luxury brand flagships in Hong Kong.”

Inside Landmark Atrium. Source: Hongkong Land

Wharf Holdings, which released interim results for the half-year period ended June 30, said it expects more feeble recovery in its businesses in both mainland China and Hong Kong. Its retail properties include Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay. 

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Hongkong Land earlier reported (on July 28) an improved performance by its luxury retail portfolio, comprised of the 12 interconnected buildings that include Landmark Atrium, Prince’s Building, and the Landmark Mandarin Oriental in Central, which offset a lower contribution from its office portfolio.

Sun Hung Kai Properties (SHKP), the owner of Hong Kong shopping centres such as IFC in Central, Moko in Mongkok, Yoho Mall in Yuen Long, and Newtown Plaza in Sha Tin, is scheduled to release earnings in September.