Retail sales extend 16-month streak despite visitor growth cooling

High street vacancy fell to 6.0% in Q3 as landlords gained confidence in rent talks. 

Hong Kong retail sales grew for a 16th consecutive month in August, even as retail leasing volume fell in the third quarter (Q3) of 2026, CBRE reported.

Falling vacancy gave landlords confidence in rental negotiations, pushing high street rents up for a 17th consecutive quarter. Visitor arrivals grew 2.6% year on year in Q3, slower than the 8.7% growth in the second quarter (Q2). Arrivals helped lift retail sales 4.5% year on year in July and 5.6% in August.

Leasing volume in core districts fell 22% quarter-on-quarter (QoQ) to 290,000 square feet (sq. ft.). The drop followed a robust Q2, which was the third most active quarter on record.

Year-to-date leasing volume reached 883,000 sq. ft., or 77% of 2025's total. Food and beverage (F&B) accounted for over one-third of quarterly leasing volume, followed by fitness centres, which leased 50,000 sq. ft., mostly in upper-level shops.

High street vacancy in core districts fell 0.5 percentage points QoQ to 6.0%, the second-lowest level since fourth quarter of 2019. Rents rose 0.9% QoQ, bringing year-to-date growth to 2.7%.

"As vacancy in key high street districts continued to decline, landlords gained greater confidence in rental negotiations, supporting moderate rental growth," said Lawrence Wan, executive director, head of retail leasing, CBRE Hong Kong.

We expect retail leasing momentum to remain healthy in the coming quarters as tourism and consumer spending continue to recover," he added.