• Colliers International releases Colliers Flash: Hong Kong retail sector Q1

    27 June 2018

    (25 June 2018, Hong Kong)  Colliers International (NASDAQ: CIGI; TSX: CIGI), a global leader in commercial real estate services, has released the latest flash report for Hong Kong’s retail sector after a strong rebound. The report highlights the latest news and trends in the retail property market, focusing on the sector’s impressive start into 2018 with retail sales from January to April growing 13.9% YOY, reaching new record levels comparable to the last market peak (it remains 1.7% below same period in 2013, the previous peak). Retail sales may grow faster than expected based on strong results in Q1 and Q2, followed by a strong summer and a busy year-end period. Hence, Colliers expects retail sales to increase by 8–10 % YOY in 2018. However, retail rental should only see a moderate recovery in                                             2018 with overall high-street rents growing by 1-3% YOY in 2018 and 3-5% YOY in 2019.

    Experiential shopping for retailer success

    Millennials and Generation Z have been driving the retail market towards more lifestyle consumption and experiential shopping. Retail brands are looking towards a brighter market outlook by meeting the demands of millennials rather than focusing on luxury shopping demand from mainland tourists. As online shopping in Hong Kong grows in popularity, Colliers believes offering a better in-store experience as part of an omnichannel strategy is indispensable for mall operators and retailers alike. The trend towards digital retail will keep accelerating, and concept stores high in technology and lower in footprint are likely to expand.

    Gradual rise of retail rents

    With strong take-up on first-tier high-streets due to robust demand for prime space created by premium fashion, health and beauty brands, landlords are staying firm on asking rents and their rental positions. However, secondary streets will still have vacancies, thus rents will likely remain under pressure. Colliers expects shops with a lump sum rental of over HK$1.5 million (USD 191,200) per month to be less in demand. Current developments support Colliers’ expectations that rents will edge up by 1-3% YOY in 2018 and start to accelerate in 2019, rising between 3-5% YOY.

    New brands in the city

    Hong Kong continues to be the destination for international brands entering Asia and the Greater China market. In addition to international brands such as MLB and Daniel Wellington, Asian and Mainland Chinese brands have also been active in searching for the right locations. Likewise, the F&B sector has continued its rapid expansion, with concepts such as Paper Moon, Shake Shack and Ralph’s Coffee celebrating their Hong Kong debut.

    Visit Colliers International website to download full copies of the reports or feel free to contact PLUG PR.

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