Hong Kong retail rents continued to drop at the turn of 2017, with rent prices for the first quarter of the year recording double-digit declines on average across all major retail areas.
According to an exclusive report created for Retail in Asia by Everbright Property Investment Consultancy Ltd, major lease transaction records in Hong Kong’s high-traffic tourist areas — including Central, Causeway Bay Mong Kok and Tsim Sha Tsui — featured drops in monthly rents of up to 72% in some cases.
SEE ALSO: REPORT: Hong Kong retail rents slip further in Q3 2016
On average, Causeway Bay witnessed the sharpest rent price decline, down 31%, hurt by Arome Bakery and lingerie brand Bonluxe, who renewed lease agreements at a discount of 60% and 69%, respectively. Interestingly, Intimissimi also secured a lease renewal of $HK950,000 in March, a 59% discount from $2.3 million in the last contract, showing the negotiation rental power for lingerie brands in Hong Kong last quarter.
Tsim Sha Tsui suffered on average a 30% drop in retail rental value, pushed down by Bestmart 360’s reduced rent on Hankow Road by 72% or HK$175,000 per month.
On Queen’s Road Central, Brunello Cucinelli recorded a 33% reduction in rent, which sees the Italian luxury brand part with HK$600,000 per month for the next year, compared with a previous monthly rent of $900,000.
To get the entire overview of where Hong Kong retail rents are headed, download the Q1 2017 Lease Transactions report now.