Which retail submarket recorded the lowest Q3 vacancy rate in Hong Kong? | Real Estate Asia

Which retail submarket recorded the lowest Q3 vacancy rate in Hong Kong?

The vacancy rate in this submarket declined by 2.6ppt to 5.3%.

The summer months saw a hike in tourist arrivals in Hong Kong with 10.4 million visitors registered for the whole of Q3 2023, 23% more than the 8.4 million people who arrived in Q2 2023, according to CBRE. 

However, the thirty-day moving average tourist arrival figures have been on the drop since September, gradually normalising after the school holidays.

Here’s more from CBRE:

Overall retail market sentiment improved further in Q3 2023. Total retail sales continued to climb from a year earlier, growing 15.1% y-o-y in July and August combined. Year-on-year growth, however, continued to slow compared with the 17.5% and  24.1% y-o-y growths registered for Q2 2023 and Q1 2023, respectively.

Overall leasing volume for high street shops reduced by 14.4% q-o-q to 368,000 sq. ft. in Q3 2023. Amongst the key retail trades, restaurants and cosmetics/pharmacies retailers were relatively more active, contributing 41% of the leasing volume during the quarter.

Healthy leasing demand helped vacancy edge down by 0.2-ppt to 11.4%. Causeway Bay vacancy dropped 2.6-ppt to 5.3%, the lowest vacancy rate of any submarket. Tsim Sha Tsui saw vacancy fall by 2.9-ppt, reaching 13.0%. Vacancy in Central rebounded by 3.9-ppt, pushing vacancy back up to 10.5% after maintaining single-digit figures since Q2 2021.

Improved sentiment and vacancy saw high-street rental growth accelerated further by 2.4% q-o-q in Q3 2023, after growing 1.2% q-o-q and 1.9% q-o-q in Q1 2023 and Q2 2023, respectively. 

Lawrence Wan, Senior Director, Head of Advisory & Transaction Services – Retail, CBRE Hong Kong: “The retail leasing market continued to track well in Q3 2023, owing to improved inbound tourism which encouraged some retailers to look for expansion opportunities in the core shopping districts. However, residents’ enthusiasm for outbound travel during the school holidays also ensured slower business growth for retail outlets in neighbourhood locations, balancing the overall picture. The upcoming Golden Week holidays and the government’s ‘Night Vibe’ initiative will see a noticeable boost in overall footfall and business growth, setting a good scene for retail and F&B businesses. Leasing momentum is expected to remain healthy in Q4 2023.”

 

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