Kai Chiu Road, Haiphong Road emerge as retailers most favoured shopping streets
Retail rents in Haiphong Road are now only 40% lower than pre-pandemic levels.
The high demand for retail shops spanning 1,000 square feet and 2,000 sqft prompted a reshuffling of first-tier shopping streets, with Kai Chiu Road in Causeway Bay and Haiphong Road in Tsim Sha Tsui emerging as the most favoured shopping streets in Hong Kong.
The two shopping streets drew the highest level of leasing activity so far this year, reported JLL.
In terms of rents, Kai Chiu Road has reduced its rental gap with Russell Street by about 40 percentage points. Rents in Haiphong Road, meanwhile, are only 40% lower than the pre-pandemic levels.
Prior to the pandemic, retail rents on Russell Street were 110% to 120% higher than those on Kai Chiu Road. Currently, the retail rental differential stands at 70% to 80% in favour of Russell Street.
At Kai Chiu Road, JLL assisted a local cosmetics and pharmacy brand to lease the G/F shop of No. 4 Kai Chiu Road. The monthly rent of the 1,500 sq ft shop exceeds $500,000, 40% higher than the rent of a fashion store during the pandemic.
The new rent, however, remains more than 75% lower than the previous lease when Chow Tai Fook rented the shop for $2.3m per month at the peak of the market.
Looking ahead, JLL believes that retailers will continue to focus on medium-sized shops in high-traffic shopping districts as the retail market has not yet fully recovered.