Retail rents up 1.8% QoQ in 1Q24 amidst tourism surge

Tsim Sha Tsui led submarkets with a 2.6% increase.

Overall high street rents rose by 1.8% QoQ in 1Q24, with a 2.6% increase in Tsim Sha Tsui, driven by a surge in tourists, Colliers reported.

However, the constrained purchasing power hampered retail sales recovery, showing only a 1.4% YoY increase in the initial two months of 2024.

Tourist arrivals recorded in January and February 2024 reached 7.8 million, whilst departures were 15 million.

To promote tourism recovery, the government has launched various campaigns and events, such as the inclusion of Xi’an and Qingdao in the Individual Visit Scheme (IVS), which will likely increase inbound tourism and retail sales in the coming quarters.

Colliers expects rents to increase over the next two quarters, particularly for premises costing  $500,000 to $1m monthly.

Meanwhile, Colliers sees growing expansions from goldsmiths and fitness shops and a slowdown in F&B demand due to the outbound travel rush.

Colliers said the potential relaxation of one trip per week and expansion of the IVS should benefit the retail market.