Retailers are urged to take advantage of it.
Challenges in the Hong Kong retail sector remain significant with slowing visitor arrivals, falling tourist expenditure and the strong Hong Kong dollar further squeezing sales across the board.
According to a research note from Colliers International, however, demand from international brands for the right physical space in prime locations remains strong.
Retailers should take advantage of softening rents to expand their presence in the city. Colliers Research predicts rents of prime street shops will decline by a further 10% for the whole year of 2016.
Here's more from Colliers International:
Godiva, a Belgian chocolate company, opened a store on D’Aguilar Street, Central, during Q3 2016 with a rent reduction of almost 40% compared to the previous lease in 2014. It is Godiva’s first standalone shop in Hong Kong as the company normally runs stores in shopping malls.
This is a tactic that was previously prohibitive on cost grounds. In addition, the American fashion retail brand Forever 21 opened its second store, a new three level store of 19,000 sq ft, in Mong Kok; Minki (street-style-meets Scandi-chic design brand under H&M) opened its fourth standalone store at Windsor House in Causeway Bay; and the French sportswear brand Lacoste took over the space at The One in Tsim Sha Tsui which was previously occupied by a luxury watch brand.
Furthermore, Da-Jiang Innovations Science & Technology Company (DJI), the world’s biggest maker of drones, said it would open its 10,000 sq ft store (over three floors) at Tower 535 in Causeway Bay, according to the SCMP on 29 August 2016.
Hong Kong would mark the third flagship retail location for DJI, following the company’s first store in Shenzhen and the second outlet in Seoul that opened in March. Earlier in May, DJI expanded its “Experience Zone” inside Terminal 1 of the Hong Kong International Airport to show travellers the latest aerial photographs and videos taken by drones.
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