Prime Hong Kong street-shop rents rise faster than expected
Prime Hong Kong street-shop rents rose 4 per cent in the first three quarters of this year, ahead of the up-to 3 per cent rise prediction by Savills a year ago.
In a third-quarter real estate briefing released yesterday, Savills said shopping-centre retail rents, which Savills expected would fall as much as 5 per cent, have actually risen 2 per cent year to date.
Savills expects prime Hong Kong street-shop rents and shopping centre rents will rise by about 2 per cent next year.
“In the retail market, despite the headwinds of a weaker RMB, more competition from regional cities and elevated new supply in the New Territories, rents will rise modestly,” the company predicted.
“New infrastructure in the form of the High Speed Rail Link and the Macau Bridge will improve accessibility for mainlanders, while domestic consumption expenditure is expected to remain reasonably robust. Online retail continues to make limited gains in the Hong Kong market.”
Savills said prime street shops proved the only real estate category in Hong Kong to post a decline in sale value on a per square foot basis, falling 3 per cent – a stark contrast to the 10-12 per cent rise in flatted factories and warehouses, and 8 per cent rise in luxury apartments.
The company predicts prices for prime high street shops are likely to fall by up to 5 per cent next year.