The annual CBRE survey polled 294 retailers of merchandise ranging from luxury goods to mass-market products across 69 countries to establish in which countries and cities they were located, and to identify trends in the patterns of global expansion.
“Hong Kong benefits from being regarded as a premier retail destination from both a Western and Eastern perspective, attracting luxury retailers from across the world, including those that are principally Asian in focus,” says CBRE in its report, How Global is the Business of Retail?
Hong Kong ranks No 1 for “luxury and business fashion” with 43 of the 47 luxury retailers that were surveyed — such as Louis Vuitton and Hugo Boss — reporting that they have stores in the city. Second was London with 41 stores, then Dubai with 40 stores.
“Despite a difficult trading year for retail markets across the world, luxury retailers in particular have continued to expand in Hong Kong and across Asia. The inherent medium- to long-term growth potential in many Asian markets remains very attractive to international retailers,” says Dominic Stead, head of corporate and client development for Asia at CBRE.
Now in its third year, the CBRE survey also identifies the top 20 cities that have the largest number of retailers, and in this category Hong Kong ranks fifth, with 43% of the 294 retailers surveyed disclosing that they have a presence in the city.
First was London, where 56% of the retailers reported a presence, followed by Dubai (55%), Paris (46%), and New York (44%).
Stead says numerous apparel retailers such as Gap, Topshop, Forever 21, and Abercrombie and Fitch also report that they are actively looking for retail space in Hong Kong.
“They are keen to expand their presence in Hong Kong but the challenge is space,” he says.
The new stores are looking for retail space in prime locations such as Central, Causeway Bay, and Tsim Sha Tsui, of between 10,000 and 20,000 sq ft, Stead says.
Given the shortage of space in the busiest shopping locations in the city, Stead says, it could take a prospective entrant several years to secure a lease and open a store.
The concern for Hong Kong is that such a prospective new retail tenant would simultaneously be looking at Shanghai and Beijing to open an Asian outlet.
But he does not think Hong Kong — ranked as the third most expensive retail location in the world — was pricing itself out of the market.
“A new brand from the US or Europe would often prefer to set up its first store in Hong Kong as a way to test the Asian market,” he says.
In addition, the city remains competitive considering its strong retail sales and high quality of shopping centres such as Harbour City in Tsim Sha Tsui and IFC in Central.
In April the value of total retail sales recorded a 15.6% y-o-y growth to HK$25.1 billion (RM10.7 billion), according to figures from the Census and Statistics Department.
CBRE says it received an encouraging response from prospective tenants invited to offer expressions of interest in a 51,188 sq ft space in the Capitol Centre at Jardine’s Bazaar, Causeway Bay. The space is currently occupied by health and beauty chain store Watsons and the lease expires in August 2011.
Stead says inquiries were received from both new overseas retailers who wanted to establish a foothold in Hong Kong as well as existing retailers looking to expand their networks. — SCMP
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 810, June 14-20, 2010
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