Causeway Bay rents lead downturn
Preliminary results from CBRE Hong Kong’s third quarter real estate survey backs up anecdotal evidence that Hong Kong’s retail rents continue to fall as the year progresses.
CBRE says shops in core shopping districts across the city were “mostly leased or renewed at rents lower than their previous terms.
The fall was most noticeable in Causeway Bay rents as retail sentiment across the region further weakened..
CBRE, which will release the full details of the report later this month, said there were more surrender leases in the third quarter.
Sports brands and fitness centres were “relatively active” in taking up space.
As previously reported by Inside Retail Hong Kong, lease renewals in high street locations (as opposed to shopping malls) are generally being signed at between 10 and 20 per cent less than the previous rental rate. However in extreme cases, rents are down by between 30 and 50 per cent.
Perhaps the most jigh profile example was Adidas taking over the former Coach flagship site in Central. Rent for that site was down 23 per cent, while in Causeway Bay, cosmetics retailer Colourmix signed up for the 1000 sqft space in Russell St, previously occupied by watch maker Jaeger-LeCoultre, for 43 per cent less.
Total retail sales declined by 4.2 per cent in July and August combined, while watch and jewellery sales fell seven per cent.