Hong Kong retail street rents to drop by a further 10-15% in 2023

Rent adjustments are not expected to improve vacancy rates.

Despite the new round of electronic consumption vouchers issued by the Government, Knight Frank says Hong Kong’s retail market remained weak. 

Here’s more from Knight Frank:

As the number of inbound tourists will not increase significantly at this stage, and local consumption is weakened by the economic downturn and wealth effect, we expect the monthly retail sales value to hover below HK$30 billion in the short term.

Looking ahead to 2023, Hong Kong's retail market has no sign of bottoming out, so we expect overall retail street rents to drop by another 10-15% YoY. Retailers are not optimistic about the market outlook, with only a small number of retailers in the F&B and necessity sectors considering opening new shops.

Further rent adjustments will not significantly improve the vacancy rate. If the Chinese mainland border reopens, it will encourage retailers to reopen or expand their retail outlets. Only then the vacancy rate will fall, and the retail landscape will be dominated by experiential consumption.