Retail street rents to decline 10-15% YoY in 2023

Retailers are not optimistic about the sector’s outlook, according to Knight Frank.

Hong Kong’s retail street rents are expected to decline by another 10% to 15% year-on-year as the retail market is not showing signs of “bottoming up” this year, according to Knight Frank.

Helen Mak, senior director, and head of Retail Services, said retailers are not optimistic about the outlook as only a small number of retailers in the food and beverage and necessity sectors are looking at opening new shops. 

“Further rent adjustments will not significantly improve the vacancy rate,” Mak said. 

“If the Chinese mainland border reopens, it will encourage retailers to reopen or expand their retail outlets. Only then the vacancy rate will fall, and the retail landscape will be dominated by experiential consumption,” she added.

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Mak said the retail market in Hong Kong remained weak even if the new round of electronic consumption vouchers had been disbursed. 

Knight Frank also expects monthly retail sales value to be below HK$30b in the short term, as the number of inbound tourists is not expected to grow significantly at this stage and the economic downturn and wealth effect will weaken local consumption.