HK's Causeway Bay among world's highest retail rent

HONG KONG: Retail rent rates at Russell Street in Causeway Bay here continued to be the highest among premier streetfront rates in Asia Pacific as of March 2010, according to Colliers International Spring 2010 Global Retail Highlights.

With retail rents of US$1,205.46 psf per year (RM4,000), the street was also third-highest in the world. Hong Kong’s ranking in Asia Pacific and the world remained the same, compared to the same period of last year.

In the Asia Pacific region, retail rents at Pitt Street Mall in Sydney ranked second-highest (sixth worldwide) with retail rents of US$768.85 psf per year (RM2,550 psf per year), while Ginza-Chuo Avenue in Tokyo ranked third (11th worldwide) with US$545.91 psf per year (RM1,810 psf per year), as of March 2010.

Singapore, Shanghai, Delhi and Beijing remained among the top 50 cities with the most expensive retail rents, with a slight upward adjustment over a 12-month period.

Colliers International (Hong Kong) director of research & advisory Simon Lo said that the high ranking of retail rents in Hong Kong can be attributed to the support of strong retail sales.  In April 2010, the total value of retail sales recorded HK$25.1 billion, rising 15.6% year-on-year (y-o-y)

“In addition to local consumption, spending by tourists continued to provide a major impetus to the growth of the local retail sales.  The number of inbound visitors rose 14.6% y-o-y to 2.76 million in April 2010,” he added.

Colliers International (Hong Kong) director of retail services Helen Mak noted that besides Causeway Bay, Asia Pacific is another key and prospective shopping district in the local market, as it attracts the attention of retailers who set up for long-term businesses in Hong Kong.

The research house expected the local retail sales in Hong Kong to see a prospective growth due to the additional push of inflationary pressure and the sustained growth of inbound visitors. Its research showed that the retail rent of ground-floor shops in Hong Kong’s traditional shopping districts is projected to stage a growth of about 10% in the next 12 months.

Colliers International, nevertheless, said that retailers in Hong Kong were still expressing caution in terms of expanding and committing to new stores, although the country’s retail market has been registering encouraging performance.

“However, evidence is mounting to suggest the worst of the downturn was over and high-end retailers would be back pressing for more high profile stores. While many of the world’s rich feel more secure and comfortable with luxury purchases, demand for high-end retail premises is expected to increase over the coming year,” the research house added.

It noted that the emergence of a sizeable middle class in Asia Pacific, the Middle East and central and eastern Europe is sure to continue, and these “aspirational” consumers will be a key source of growth for many luxury retailers.

Globally, Colliers International Spring 2010 Global Retail Highlights also showed that retail rents at Champs Élysées in Paris were the most expensive worldwide, followed by that at Fifth Avenue in New York, which retreated from the top spot in March 2009,” Colliers International said in a statement on June 9.

The Highlights features rents for 127 premier retail streets around the world.