Hong Kong’s retail property vacancy hits lowest rate since Q1 2020

Vacancy rate in the sector was down to 11.6% in H1.

Vacancy rate in Hong Kong’s retail property sector fell to 11.6% in the first half of the year, the lowest rate since the first quarter of 2020, on the back of the strong leasing momentum in the second quarter.

In a statement, CBRE said the strong leasing demand in the second quarter was due to the issuance of new consumption vouchers in April and the Golden Week in May.

“The gradual recovery for the retail market is tracking prosperously with local consumption already returned to the level in 2019. Inbound tourism is achieving half the levels before the 2019 downturn, ensuring slower recovery of tourist consumption,” said Lawrence Wan, Senior Director, Head of Advisory & Transaction Services – Retail, CBRE Hong Kong.

ALSO READ: Retail sales value jumps 18.4% YoY in May

“Overall, retailer strengthened noticeably in H1 2023. While pharmacies, galleries, and some F&B chain groups are now looking to expand quickly, luxury brands remained largely cautious and will take some time for them to further observe the latest spending pattern of Mainland Chinese tourists before they will be more engaged in leasing,” he added.

CBRE said there were around 870,000 square feet of registered retail liaising volume in the first half, the highest for a half-yearly period recorded.

Per sector, food and beverage accounted for 32% of the new leasing activity as several chains from the Mainland launched in Hong Kong.

Despite expanding presence on high streets, luxury cosmetics and jewellers remained overall slow in terms of leasing, whilst pharmacies were active but opted for smaller shops.

Meanwhile, CBRE said Causeway Bay posted the strongest release of vacancy pressure as it is down to 7.9%, drawing close to Central’s 6.6% vacancy rate.