Colliers International, Hong Kong

Positive Rental is Expected in 2010 

With an economic recovery in sight, Hong Kong's retail sector paints a confident picture of healthy growth ahead.  The market is aligning as rentals begin to taper off, and small to medium-size local retailers are more active in acquiring new sites for expansion.

At a press briefing today, Simon Lo, Director of Research & Advisory, Colliers International, pointed out that Hong Kong's private consumption expenditure has improved from -6% year-on-year (YoY) in first quarter 2009 to -1% YoY in the second quarter.  Market intelligence such as the Economic Intelligent Unit also forecast that Hong Kong would come out from recession to recovery in 2010.  Furthermore, some companies started to resume recruitment as the recession has bottomed out.

"Private consumption has remained relatively resilient since the onset of the global financial crisis a year ago, although there has been a short-term decline, especially in 2Q 2009 due to the outbreak of the H1N1 flu virus," added Simon.

Statistics from January to July 2009 show that supermarket and food were the key growth areas.  Despite the year-on-year drop in sales, consumer goods such as pharmaceuticals and cosmetics fared well when compared with the sharp decline in fuels and consumer durable goods like electronic equipment and clothing and footwear.

Simon pointed out that the retail sector was overly pessimistic during the first half of 2009, with the deterioration of external environment.  However, there has been a notable rise in retail activity since June, when the number of Chinese visitors started to pick up and the market began to be more optimistic of an early recovery.

"Of all the sectors, we expect Food & Beverages to take the lead in growth," said Helen Mak, Director of Retail Services.  "Hong Kong has a strong dine-out culture.  Consumers have adjusted down their spending, but they do not change their habit of eating out.  Such habit sustains the growth of F&B, which has in fact remained active for the past year."

"In recent months, we have received more enquiries, which show local retailers have regained confidence in the market. They are more certain to go ahead with their business plan or commit to new lease," said Helen.

"However, high-end fashion retail business is still under pressure.  It may take another few months before international retailers resume its full activity in the local market," said Helen.

Looking ahead, Hong Kong is expected to have a mild inflation of about 2% in 2010.  Meanwhile, retail rentals are expected to stay flat or edge up 3% at maximum in the next twelve months.  If the inflation is higher than expected next year, retail rentals are anticipated to follow suit for a higher growth of over 3%.

About Colliers International

Colliers Macaulay Nicolls Inc. (CMN) operating as Colliers International is a leading global real estate services company that provides a full range of services to real estate users, owners and investors worldwide. Colliers operates in 294 offices in 61 countries.  In Asia Pacific, Colliers has 64 offices in 15 countries.  Services include brokerage, property management, hotel investment sales and consulting, corporate services, valuation, consulting and appraisal services, mortgage banking and research.  Colliers International is a worldwide affiliation of independently owned and operated companies.  Locally, Colliers professionals serve clients in Hong Kong.

Contact Information

May Chow        
Regional Manager
Communications and PR, Hong Kong Marketing
Colliers International (Hong Kong) Ltd
Tel    852 2822 0736
Fax   852 2868 5275
Email: May.Chow@colliers.com

 back to top