Food
Two-thirds of retail strips in Asia Pacific saw rental declines in 2020, with Causeway Bay in Hong Kong experiencing the steepest decline at 43%, according to Cushman & Wakefield’s latest Asia Pacific Main Streets Report. Causeway Bay had been #1 across the globe in retail rental value in the last 2 years. Yet, its position was taken over by Tsim Sha Tsui in 2020. Retail rental dropped by 42% and 35% year-on-year for Central and Tsim Sha Tsui respectively. On average, retail space rental value citywide has fell by 38% in Hong Kong over the course of 2020.
“Ownership diversity is the key differentiator between Tsim Sha Tsui and Causeway Bay retail rental performance. Ownership of Canton Road in Tsim Sha Tsui, the main shopping area, is more centralized when compared with Russell Street of Causeway Bay. In times of crisis, centralized ownership allows for more flexible measures to retain tenants, thus maintaining a more stable trade mix with a cluster of renowned brands with optimal brand impact,” said Mr. Kevin Lam, Cushman & Wakefield’s Executive Director, Head of Retail Services, Hong Kong. “Looking ahead, with international travel made possible again towards the later part of 2021, together with a stable trade mix, we would expect retail rental performance to recover first in Tsim Sha Tsui district for the same reason,” Mr. Lam continued.
However, the retail sector in Mainland China had the least disruption amongst all the markets in the region, with average rental declines of 5%. In contrast to the Beijing Central Business District (CBD) which had a 14% decrease in rental in 2020, the Luohu district in Shenzhen saw the largest rental growth of 5%.
Mr. Keith Chan, Cushman & Wakefield’s Director, Head of Research, Hong Kong, commented, “Hong Kong remained in the top position regardless of the average retail rental drop of 38% in 2020. Tsim Sha Tsui still sits 31% above the second place, Ginza of Tokyo. This reflects the exceptionally high retail rentals in Hong Kong regardless of the pandemic outbreak and economic downturn.”
“The key market drivers in operation due to COVID-19, namely international border closures, lockdowns and work-from-home practices have been universally felt across the region. As a result, we see little change in Asia Pacific rent cost rankings, at least for the top 10 cities, with Hong Kong, Tokyo, Sydney, Seoul and Osaka maintaining their dominance at the top of the list,” noted Dr. Dominic Brown, Head of Insight & Analysis, Asia Pacific at Cushman & Wakefield.
