Spanish fast-fashion brand Mango has signed a three-year lease for a new shop in Central, Hong Kong’s prime retail district, at a discount of more than 50 per cent from its peak more than a decade ago.
The outlet will occupy 14,000 sq ft over two levels at Asia Standard Tower in Queen’s Road Central. The lease runs from September 1 to August 31, 2027.
The monthly rent for the premises is set at HK$1.25 million (US$160,220) in the first year and will increase by HK$50,000 in each of the next two years, according to data published on the Land Registry website on Monday.
The new rent is 55 per cent lower than the peak of HK$2.8 million in 2012, when British high street retailer Topshop operated its flagship store through its partnership with Lab Concept, a unit of luxury fashion and lifestyle department store Lane Crawford, according to the Land Registry. In 2017, Topshop bargained the monthly rent down sharply to HK$1.5 million, the Post has previously reported.
Topshop closed its last and largest store in Hong Kong in October 2020 when the contract expired.
In the past four years, the property has only been rented out on a short-term basis to tenants such as La Prairie, a high-end Swiss skincare brand. The landlord charged a monthly rent of around HK$500,000 for tenancies of one to two months, according to local media reports.
Hong Kong’s retail market has been mired in a slump since the coronavirus pandemic hit the city’s tourism sector. The trend of residents heading across the border post-pandemic to spend on cheaper goods and services has rubbed salt on the sector’s wounds.
Retail sales in June declined 9.7 per cent year on year to HK$29.9 billion, the fourth consecutive monthly contraction, according to official data. Total retail sales in the first half fell by 6.6 per cent, placing them 22.7 per cent below the level in the first half of 2018.
The contraction in retail sales has had an impact on the commercial leasing market. Leasing momentum softened in the first half partly due to reduced space availability and rising uncertainty in consumer spending, according to CBRE.
Vacancy rates for high street shops in core districts improved to 6.8 per cent in June from 9.1 per cent at the end of last year, according to the property consultancy. In Central, the vacancy rate fell to 9.2 per cent from 11.8 per cent in the same period. In Causeway Bay, the vacancy rate contracted to 3.9 per cent from 5.3 per cent, while in Mong Kok it improved to 6.3 per cent from 9.7 per cent in the same period.
Slower leasing momentum has led to a marginal slowdown in rental growth, CBRE said, adding that rents of high street shops increased by 3.7 per cent in the first half.
