Hong Kong high-street retail rents dropped slightly in the final quarter of last year as weakened market sentiment impacted sales growth.
According to a market update from property company CBRE, shop rents for the four core retail areas in the city dipped by 0.4 per cent quarter on quarter in the last three months of last year. However, full-year rents managed to record 0.2 per cent growth, bringing an end to four years of annual declines.
Vacancy rates in tier 1 streets in the four core retail districts edged up by 0.2 percentage points from 3.6 per cent in the third quarter to 3.8 per cent in the last quarter. However, the full-year vacancy rate fell by 0.3 percentage points to 3.8 per cent compared to 4.1 per cent a year earlier.
CBRE said market sentiment weakened in the fourth quarter, impacted by the US-China trade conflict and volatility in the stock market.
While retail sales rose by 6 per cent year on year in October, growth slowed to just 1.4 per cent in November – the slowest monthly increase since June 2017.
“Visitor arrivals remained solid, recording 15.9 per cent growth year on year in October and November combined, the strongest quarterly growth last year,” said CBRE’s report.
“This ensured continued strong leasing demand from health, personal care and cosmetics retailers.”