International brands are moving to quieter areas of Hong Kong for cheaper rents.

The New Territories, one of the three main parts of Hong Kong, in particular is attracting retailers who want to reduce their operating costs.

Swedish retailer H&M will open a flagship at Tai Po Mega Mall by the end of the year.

Maureen Fung Sau-yim, GM of Sun Hung Kai Real Estate Agency’s leasing department, says regional malls are attractive to retailers as rents are lower and turnover and shopper traffic are comparable to those in urban areas like Tsim Sha Tsui.

“Some retailers have turned cautious in leasing because the growth of retail sales has slowed in recent months,” said Michele Woo, executive director for retail at consultancy Cushman & Wakefield.

“They would rather expand in shopping malls in Sheung Shui and Tuen Mun than in second or third-tier shopping streets in core districts. They have found that it is more profitable to rent a shop in the new towns.”