Ginza-style commercial building in neighbourhood areas attracts local consumption

Ginza-style commercial buildings were previously mostly concentrated in core areas, such as Causeway Bay, Tsim Sha Tsui and Mong Kok, to attract tourists.

With the changing consumption patterns of tourists and the increased travel of Hong Kong residents to mainland China, Ginza-style commercial buildings have adapted to focus on meeting the daily needs of locals, to enhance their competitiveness.

Ginza-style shopping malls spread across Hong Kong

Ginza-style commercial buildings are typically single buildings with more than 20 floors that primarily cater to retail activities. The tenants encompass a range of industries including catering, entertainment, and services. Each floor usually has a small floor plate with one or two operators.

During the pandemic, many commercial building owners carried out renovation projects to turn their properties into multi-purpose commercial buildings. This led to the emergence of Ginza-style commercial buildings in neighbourhood areas, with a focus on attracting local consumers.

Unlike the traditional Ginza-style buildings in core areas, these neighbourhood buildings are more “on-the-ground” and offer one-stop lifestyle services with popular businesses such as restaurants, beauty salons, hair salons, and educational institutions.

Some Ginza-style commercial buildings located in the neighbourhood areas are inclined to attract local families. Recently, a retail commercial project in Tai Kok Tsui, Mong Kok has been repositioned after the renovation was completed at the end of 2022.

Currently, several floors are available for lease, and the plan is to introduce tenants from the catering, education, fitness,
interest classes, medical, and beauty sectors to cater to the needs of the surrounding communities.

For example, if parents take their children to a nearby interest class or tutorial centre, they will have about one to two hours of free time. Just within the same building, there are also beauty centres, massage services, fitness rooms or hair salons in the same building, allowing these parents to enjoy some “Me Time”. They can then pick up their children conveniently and return home afterwards.

Stable rents attract tenants; pay attention to building facilities

Stable rents are a major attraction for tenants in Ginza-style commercial buildings. These buildings aim to offer consumers one-stop services that fulfil their daily needs. The synergy between tenants can drive consumption.

In addition, Ginza-style commercial buildings have stable rents, so they are popular with many local businesses. However, when tenants are looking for their favourite spots, they must choose suitable premises that fit the nature of their
business.

For example, besides ensuring access to water and electricity supply, restaurant operators need to consider gas supply and related cooking equipment. Sufficient restroom facilities for customers are also important. Additionally, tenants should pay attention to factors such as ceiling height, fire safety measures, and escape routes, ensuring compliance with relevant
safety regulations.

If tenants in the medical sector require heavy medical equipment, they should verify whether the building's floor loading can support the equipment and whether the building has the capacity to transport it to the premises. Beauty salon tenants should also assess the water supply and drainage facilities within the building.

In light of the rapidly changing environment, the increasing travel of Hongkongers to mainland China, and evolving consumer patterns among tourists, Hongkongers may reduce unnecessary expenses, but they are unlikely to cut back on daily necessities and family education expenses.

This presents an opportunity for owners of Ginza-style commercial buildings in neighbourhood areas to attract local consumers with one-stop lifestyle services. Investors and tenants should closely monitor the development of these related sectors to capitalise on the potential opportunities.