Hong Kong Shop Leasing Market Steady in July Amid Rental Adjustments
AM730 · 1 SOURCESabout 2 hours ago2 MIN
Summary
Hong Kong's retail shop leasing market demonstrated resilience in July 2024, with transaction volume and value maintaining month-on-month stability. According to data from Centaline (Industrial & Commercial) Property, the market recorded approximately 366 shop leasing transactions worth about HK$30.8 million in July, showing modest year-on-year growth of nearly 20% in volume. The core district vacancy rates have yet to show significant improvement, but experts believe the market is approaching a bottoming point as more brands prepare to enter ahead of major holidays.
Key Points
- July shop leasing transactions reached about 366 deals valued at HK$30.8 million, largely unchanged from June's approximately 365 deals and HK$30.83 million, while volume surged 19.61% year-on-year
- Rental area contracted in July totaled approximately 435,000 square feet, representing a 6.27% increase from the previous month
- Japanese chain restaurant Sukiya leased a shop at 10-13, Ground Floor, AiA Financial Centre, 308 Des Voeux Road Central, Sheung Wan, at about HK$300,000 per month for 3,612 square feet (approximately HK$83 per sq ft), replacing Café de Coral MX which paid HK$400,000 monthly when it entered in late 2015 — indicating a 25% rent decline over the decade
- Central and Wan Chai recorded vacancy rates of approximately 7.37% and 6.17% respectively in July, up 0.71 and 0.25 percentage points year-on-year, while Mong Kok's rate stood at approximately 9.06%, the highest among core districts
- August traditionally marks the peak season for retail shop leasing, with brands expected to accelerate expansion ahead of the Mid-Autumn Festival and National Day golden week
Why It Matters
The sustained year-on-year growth in shop leasing volume reflects strengthening market confidence as rental levels have adjusted to more affordable levels, attracting both international and mainland brands to expand. With the approaching National Day golden week and Mid-Autumn Festival holidays, core district vacancy rates are expected to gradually improve as brands capitalize on the current favorable rental environment to establish presence in prime locations .
The sustained year-on-year growth in shop leasing volume reflects strengthening market confidence as rental levels have adjusted to more affordable levels, attracting both international and mainland brands to expand. With the approaching National Day golden week and Mid-Autumn Festival holidays, core district vacancy rates are expected to gradually improve as brands capitalize on the current favorable rental environment to establish presence in prime locations .