According to the latest report released by Knight Frank, while international brands have been competing for shops in Hong Kong’s prime locations by paying high rents, other retailers have been forced to move to more affordable spaces in non-core areas. In recent months, rocketing prices and sliding yields of prime street shops pushed investors to retail properties in non-core areas. For example, A 500-sq-ft, ground-floor unit in Yan On Mansion, Kwun Tong was reportedly sold for HK$56 million or HK$112,000 per sq ft, comparable to prices in core areas. Knight Frank expects this trend of relocation and decentralisation to continue and push up non-core retail rents by another 2–3% over the rest of 2011.
Mr Thomas Lam, Greater China Head of Research at Knight Frank says “there were a number of major sales transactions involving shopping centres last month: Swire Pacific (0019.HK) sold Festival Walk, a 1.2 million-sq-ft retail and office complex in Kowloon Tong, for HK$18.8 billion and Chinachem Group sold its 44,628-sq-ft third floor of its Tropicana Garden Arcade in Wong Tai Sin for HK$191.55 million, or HK$4,292 per sq ft.
Besides, British luxury fashion-brand Burberry plans to further expand its presence in Hong Kong by opening a two-storey flagship store in Pacific Place, Admiralty. The 21,000-sq-ft shop is expected to open in the second half of 2012. It would be Burberry’s biggest outlet in Hong Kong and its second largest in the world.
With a robust luxury retail sector, Hong Kong’s retail sales value increased for the 22nd consecutive month in June 2011, rising 28.8% year on year to HK$31.3 billion. In the first half of 2011, the total retail sales value grew 8.9% compared with the same period in the previous year. ”