Hong Kong’s most significant retail leasing transaction in September revealed

It is a 14,000 sq ft shop in New World Tower in Central.

Hong Kong’s retail market remained weak. According to a Knight Frank report, total retail sales value continued to underperform, falling 0.1% YoY to HK$28.6 billion in August. For the first eight months of 2022, total retail value fell by 1.5% YoY. 

In general, the report said consumers preferred to wait for the remaining second round of the voucher scheme distribution. This, coupled with some Hong Kong people leaving for overseas holidays under the new “0+3” quarantine scheme, dampened domestic demand. 

Here’s more from Knight Frank:

According to market sources, a large shop of over 4,000 sq. ft on Queen’s Road Central was leased to Lung Fung Pharmacy for HK$600,000 per month, for an average rent of HK$133 per sq. ft, a 57% reduction from the previous rent. Also, Matsumoto Kiyoshi, a Japanese cosmetics chain, will open a new flagship store in Fashion Walk, in Causeway Bay. The shop is the chain’s largest in Hong Kong with two floors and total floor area of over 8,500 sq.ft. 

A significant leasing case was recorded in a prime retail street during the month. A 14,000-sq-ft three-floor shop in New World Tower in Central was recently leased to Brunello Cucinelli, an Italian luxury boutique, for approximately HK$800,000 per month (or HK$57 per sq ft). The new rent was more than 70% lower than at the peak. 

Moving forward, with the various pandemic regulations still in place, such as the use of the LeaveHomeSafe app, social distancing rules, and the prohibition of large group gatherings, we urge the government to ease most, if not all restrictions, as they are seriously hindering social and economic activity. We believe a significant relaxation of the COVID-19 protocol will allow society to return to normal while still remaining vigilant, thereby improving local consumption sentiment and boosting retail sales.