HONG KONG, April 17, 2013 /PRNewswire/ -- According to Cushman & Wakefield's latest research report, Retail MarketBeat, Hong Kong's retail market saw moderate growth in early 2013 subsequent to a year of weakened, unstable sales growth last year.
A number of local retailers reinitiated their expansion plans and the market continued to see more international brands entering the arena with new stores and flagships. Despite a slump in watch and jewellery sales last year, several local retailers expanded their influence in traditional retail districts in Q1 2013. But, it should be noted that these new additions are more positioned at the middle to high-end.
Folli Follie has leased two prime street shops, one on Canton Road and another on Russell Street. Hugo Boss also tapped into Canton Road after opening its flagship in Central, which is under construction. Leading local beauty and cosmetics chain SaSa is reported to take over a two-storey shop on Russell Street after committing to a 20,000 sq ft space also in Causeway Bay.
Many retailers still regard Hong Kong as a platform to enter the rapidly expanding Chinese market. Recent new brands in the city include UGG, which will open its first Hong Kong flagship in Causeway Bay in May, while Victoria's Secret, the American lingerie icon, is planning to open two stores in IFC Mall and New Town Plaza in Shatin by mid-2013. Intense competition for limited prime-street retail space and the commitment among both established and new brands to secure prime sites and flagship spaces continues to support a high rental environment.
Prime rents have stabilised and trended slightly downward after becoming the highest globally in 2012. Sales has softened and some retailers have become slightly more cautious It is also noteworthy that there has been a slight shift away from luxury retail expansion to middle to high-end priced goods. In addition, more retailers are growing cognizant of the impacts of high rental costs and the impact on the bottom line. As a result, prime rents are expected to undergo a mild correction in 2013.
Michele Woo, Senior Director, Retail said, "Retail sales performance has moderated and visitor spending shifted, so we expect retailers to be selective in their expansions and show greater resistance to pay premium rents for prime locations. Nonetheless, Hong Kong does remain a springboard to the Mainland China market and it will continue to lure international brands. "
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