Hong Kong Property Market: Retail Leasing Trends with Fila, Abercrombie & Fitch, and More

Hong Kong Retail Leasing Dynamics

High vacancy rates in Hong Kong's retail property market are likely to persist, encouraging brands such as Swatch, Abercrombie & Fitch, and Mango to seize prime locations.

In core shopping districts—Causeway Bay, Central, Mong Kok, and Tsim Sha Tsui—vacancy rates have surged, ranging from 8.9% to 15.4% in Q3, compared to 6.8% to 12.8% in Q1, according to Midland IC&I. Analysts project a slight increase in vacancies in early 2025.

With rents down by up to 65% since 2019, many luxury and mid-market brands from America and Europe have finalized lucrative leases recently.

According to Lieman Leung, director of Midland Shops, "Vacant shops present opportunities. Brands can bring fresh business models and creative products to the local scene." Notably, sportswear giant Fila has leased multiple stores in Mong Kok.

• Panerai: HK$1.7 million/month for 9,182 sq ft in Tsim Sha Tsui.
• Abercrombie & Fitch: HK$1.5 million/month in Hysan Place, Causeway Bay.
• Mango: Occupying 19,071 sq ft in Central for HK$1.25 million/month.
• Armani: 6,000 sq ft space on Queen’s Road for HK$800,000/month.

Retail inquiries remain steady, particularly in prime areas, despite the current retail sales downturn of 7.7% in the first eight months of 2023, equating to around HK$250 billion.

Future Outlook for Retail Leasing

About 1.2 million sq ft of new retail space will launch this year, with three-fourths expected in Q4. However, rental prices for established centers may remain stable despite new supply.

Furthermore, the forthcoming Hopewell Mall in Wan Chai promises significant occupancy rates, with major tenants set to include Nitori, Toys R Us, and supermarket Food le Parc.

Opinions on rental increases vary, but regions like Central may see improvements due to recent market enhancements, while challenges still loom in high-street areas.