Higher tourist arrivals contributed to the gradual normalisation.
Whilst Hong Kong’s retail market has been in prolonged rental correction for the past three years, the market is showing signs of slow recovery as core rents stabilise in major shopping districts like Causeway Bay and Tsimshatsui, according to a press release from Cushman & Wakefield.
The retail sector benefitted slightly from increased tourist arrivals which grew 3.4% YoY as led by Mainland Chinese tourists.
Sales of jewelry and watches similarly rebounded 5..6% over the level in 2016 as opposed to 17.3% decline recorded last year.
These main factors propped up core rents in prominent retail districts of Causeway Bay and Tsimshatsui which have been in steep decline since 2013. Cushman & Wakefield notes that the increasing consumer interest towards more affordable luxury goods and athleisure products are expected to support a potential growth of up to 2% for the aforementioned core districts.
The cosmetics, accessories and lifestyle products will remain the pillars of the retail sector, said Cushman & Wakefield Head of Retail Services Kevin Lam.
Non-core areas like Yuen Long and Tuen Mun also registered a mild expansion of 1.3% and 1.1% respectively this year reflecting the strength of local consumption that focuses on basic goods and services.
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