Hong Kong high-street retail rents ease

1 min readUpdated May 30, 2025Jan 18, 20194:27 AM

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Hong Kong high-street retail rents dropped slightly in the final quarter of last year as weakened market sentiment impacted sales growth. According to a market update from property company CBRE, shop rents for the four core retail areas in the city dipped by 0.4 per cent quarter on quarter in the last three months of last year. However, full-year rents managed to record 0.2 per cent growth, bringing an end to four years of annual declines.

Vacancy rates in tier 1 streets in the four core retail districts edged up by 0.2 percentage points from 3.6 per cent in the third quarter to 3.8 per cent in the last quarter. However, the full-year vacancy rate fell by 0.3 percentage points to 3.8 per cent compared to 4.1 per cent a year earlier.

CBRE said market sentiment weakened in the fourth quarter, impacted by the US-China trade conflict and volatility in the stock market.

While retail sales rose by 6 per cent year on year in October, growth slowed to just 1.4 per cent in November – the slowest monthly increase since June 2017.

“Visitor arrivals remained solid, recording 15.9 per cent growth year on year in October and November combined, the strongest quarterly growth last year,” said CBRE’s report.

“This ensured continued strong leasing demand from health, personal care and cosmetics retailers.”

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Questions & Answers

What caused market sentiment to weaken in the fourth quarter?

Market sentiment weakened due to the US-China trade conflict and volatility in the stock market. This impact was noted by CBRE in their market update.

Which retail sectors still showed strong demand for leasing space?

Despite the overall weakening market, health, personal care, and cosmetics retailers showed continued strong leasing demand. This was supported by solid visitor arrivals in October and November.

How did the year-on-year growth in retail sales change in the final quarter?

Retail sales growth significantly slowed towards the end of the year. After a 6 per cent rise in October, growth dropped to 1.4 per cent in November, marking the slowest increase since June 2017.

Did high-street retail rents increase or decrease over the full year?

While high-street retail rents dipped slightly in the final quarter, they still recorded 0.2 per cent growth for the full year. This ended a four-year period of annual declines.

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