Skip to main content Skip to footer

Weekly Snippet | Rising retail sales encourages bold moves

Hong Kong Blog Snippet 20210915 1536x1040

According to government data, Hong Kong’s retail sales climbed for the sixth consecutive month in July, supported by an economic recovery, stabilised COVID-19, and an improved labour market. Cynthia Ng of Retail Services, is seeing an economic trickledown effect with leading brands taking up new leases, replacing the short-term pop-up tenants on Queen’s Road Central. Read the latest Weekly Snippet that also has a focus on insights from Andrew Armstrong of Industrial Services into the supply of industrial space. 

Core districts remain attractive to international brands

Hong Kong retail sales increased by 2.9% YOY in July 2021. In particular, the monthly sales of luxury goods, jewellery, watches, and other valuable gifts have seen solid growth of 27.1% YOY in July 2021. 

The market is currently experiencing strong sentiment, particularly in Central with a mix of brands taking up new permanent leases and replacing the short-term pop-up tenants on Queen’s Road Central. In terms of significant occupiers, we saw Lululemon lease a 5,000 sq. ft. duplex over G/F and M/F of H Queen’s and Samsung take a 1,654 sq. ft. space at China Building. The space is currently being short leased to Mask Factory which will be soon vacated. 

We anticipate core districts like Central - followed by Causeway Bay and Tsim Sha Tsui - will remain attractive to international labels as they look for expansion opportunities that are aligned with overall market recovery. Mong Kok as the fourth core retail district will take longer to recover with more focus on a local footprint.

Industrial supply to remain limited in the short to medium term

It may come as a surprise to many, but the total floor space classified as industrial in Hong Kong extends to approximately 23.75 million m², twice the size of the office market. Approximately 2.4 million m², or 9.29% is within ramp up access buildings of which there are currently only 15 buildings that are mainly located within the Kwai Chung/ Tsing Yi/ Tseun Wan area around the container terminal.  The current void in the ramp up logistics warehouse space currently stands at 4.44% with only three options being immediately available which offer over 4,645 m², (50,000 sq. ft.) of contiguous floor space.  

The pipeline of new stock over the next five years will deliver two further ramp up access buildings, Goodman’s Westlink in Tuen Mun (approximately 140,000 m², being delivered in Q1 2022) and Cingleot’s Premium Logistics in Chek Lap Kok (approximately 380,000 m², being delivered in Q3 2023).   

Considering the increasing rents and continuous push for better operational efficiencies from occupiers, we are not surprised that Goodman was 50% pre-leased eight months prior to occupation permit date and understand that the balance of the space is at advanced stages of negotiations. Putting further stress on supply, it is understood that Cainiao (a JV partner in the Cingleot, and the logistics arm of Alibaba) have committed to occupying the lower six floors of the Premium Logistics Centre for their own global network plans, therefore only providing approximately 180,000 m² of new stock to the market.

This doesn’t leave many options in the market meaning logistics occupiers need to enter the market early and secure space while they still can as the supply is only expected to get tighter in the short to medium term.

To #SeeWhatCouldBe and how we maximise the potential of your property, contact our experts Cynthia Ng or Andrew Armstrong today.

Related Experts

Cynthia Ng

Executive Director | Head of Retail Services

Retail Services

Hong Kong

Cynthia Ng is an award-winning retail services veteran with more than 14 years’ experience.  Cynthia was educated in Sydney and holds a bachelor degree in Construction Economics (Quantity Surveying) from University of Technology, Sydney.  She started her career with major developers in Sydney and has spent the last 11 years in Hong Kong with global property agencies working across all key retail sectors and high-profile fashion, F&B and international FMCG brands.

As Executive Director of Retail Services, Cynthia leads the successful operation of the retail brokerage business, meeting the needs of the company and her clients, while cultivating a team with the best leasing advisory and negotiating skills.

Prior to joining Colliers, she worked in CBRE as Director of Hong Kong Retail, with a key focus on international brands entering and expanding in Hong Kong. In 2015 she won the ‘Excellence in retail services’ award from CBRE, recognising her achievements in business.


View expert