High vacancy rates in Hong Kong’s retail property market are likely to persist in the near term, which is providing incentives for retailers including Swatch, Abercrombie & Fitch and Mango to snap up prime spaces, according to analysts.
Advertisement
In the city’s four core shopping districts – Causeway Bay, Central, Mong Kok and Tsim Sha Tsui – between 8.9 per cent and 15.4 per cent of shops were empty in the third quarter, up from 6.8 per cent to 12.8 per cent in the first quarter, according to Midland IC&I. Vacancy is set to increase slightly in the first quarter of 2025, to between 9 per cent and 16 per cent, the commercial property agency said.
With rents down as much as 65 per cent from historical highs in 2019, numerous American and European luxury and mid-market brands have signed expensive leases in the last three months.
“Vacant shops present opportunities,” said Lieman Leung, director of Midland Shops. “Brands opening in Hong Kong can introduce fresh business models, innovative thinking, and more creative products to the local market.”
Seoul-based sportswear brand Fila, for example, leased several shops in Hollywood Plaza in Mong Kok with an aggregate area of 5,643 sq ft for HK$1.8 million (US$232,000). Panerai, a luxury watch brand from Italy, agreed to pay HK$1.7 million a month for a 9,182 sq ft shop in Pacific Star Building in Tsim Sha Tsui. American fashion retailer Abercrombie & Fitch snapped up a 7,000 sq ft space in Hysan Place in Causeway Bay for HK$1.5 million a month. And Spanish fashion brand Mango will occupy a 19,071 sq ft shop on Queen’s Road in Central for HK$1.25 million a month.
Advertisement
Italian luxury brand Armani snapped up another shop on Queen’s Road in Central, with 6,000 sq ft of space, for HK$800,000 a month. In New Town Plaza in Sha Tin, Hollister, another American fashion retailer, chose a 10,000 sq ft space for HK$1 million a month. And Switzerland-based Swatch group will pay HK$400,000 a month for a 1,000 sq ft shop in Mira Place in Tsim Sha Tsui.