Rents for overall prime street shops down by 4.3% in Q4 2021

Rents for major shopping centres also fell by 4.3%.

Rents for overall prime street shops and major shopping centres declined by 4.3%, on a yearly basis, in the fourth quarter (Q4) of 2021, which is on a slower path compared to 2020, when rents fell by 23.4%, real estate firm, Savills, said in its report for Q4 last year.

Similarly, rents for major shopping centres also fell by 4.3% year-on-year (YoY) in Q4 2021, slower than 22.8% in 2020. 

Savills reported that the retail sector was driven by local demand and the non-existence of mainland and international tourists in 2021. The consumption voucher scheme successfully ramped up retail sales in the second half of the year, which showed a declining growth because of fading of base effect.

As for retail properties, it regained investor interest, with a total consideration of commercial transactions up to November 2021 increasing by 140% YoY to $38.3b, which is 19% higher than 2018.

Savills also bared that PRC demand for Grade A offices last year was limited as major demand drivers included crypto, art dealers and co-working operators. With this, overall Grade A rents dropped at a sluggish pace, by 1.3% quarter-on-quarter and 5.4% YoY.

The outlook for the market in 2022 stayed conservative, with tightening restrictions because of the new variant and low level of new supply which affects the price and rental levels, said Savills.