Causeway Bay is no longer Asia’s most expensive retail strip since the advent of Covid-19 – but another Hong Kong shopping precinct has kept the city on top.
Tsim Sha Tsui is now the region’s most expensive city stretch at US$1600 per square foot, per year according to data released by Cushman & Wakefield, with Tokyo’s Ginza strip in second spot at $1223. Sydney’s Pitt Street Mall maintained third place at $974.
The table is limited to one shopping strip per city, but Causeway Bay would conceivably sit second in the rankings if not. The precinct posted the sharpest decline in 2020, plunging 43 per cent, according to Cushman & Wakefield’s Asia Pacific Main Streets Report. Retail rents in Hong Kong’s Central fell by 42 per cent and in Tsim Sha Tsui by 35 per cent, contributing to a citywide decline of 38 per cent.
Two thirds of the cities on the list recorded retail rent declines according to the report.
“Ownership diversity is the key differentiator between Tsim Sha Tsui and Causeway Bay retail rental performance,” said Kevin Lam, Cushman & Wakefield’s executive director, head of retail services, Hong Kong.
“Ownership of Canton Road in Tsim Sha Tsui, the main shopping area, is more centralised when compared with Russell Street of Causeway Bay. In times of crisis, centralised ownership allows for more flexible measures to retain tenants, thus maintaining a more stable trade mix with a cluster of renowned brands with optimal brand impact,” he said.
“Looking ahead, with international travel made possible again towards the later part of this year, together with a stable trade mix, we would expect retail rental performance to recover first in Tsim Sha Tsui district for the same reason,” Lam said.
In Mainland China, retail rents were significantly less impacted during the past year, with an average rental decline of just 5 per cent.
Beijing’s CBD recorded a 14-per-cent decrease last year, however the Luohu district in Shenzhen saw the largest rental growth of 5 per cent.
Keith Chan, Cushman & Wakefield’s director, head of research, Hong Kong, said the fact Hong Kong remained the top city on the list despite the citywide rental drop – and that it remains 31 per cent ahead of the Ginza – reflects the “exceptionally high retail rentals in Hong Kong regardless of the pandemic outbreak and economic downturn”.
“The key market drivers in operation due to Covid-19, namely international border closures, lockdowns and work-from-home practices have been universally felt across the region,” added Dominic Brown, head of insight & analysis, Asia Pacific at Cushman & Wakefield. “As a result, we see little change in Asia Pacific rent cost rankings, at least for the top 10 cities, with Hong Kong, Tokyo, Sydney, Seoul and Osaka maintaining their dominance at the top of the list.”
The top 10 most-expensive retail rents in Asia Pacific in 2020 were:
1 Tsim Sha Tsui US$1600
2 Ginza, Tokyo $1223
3 Pitt St Mall, Sydney $974
4 Myeongdong, Seoul $930
5 Shinsaibashisuji / Midosuji, Osaka $805
6 West Nanjing Rd, Shanghai $600
7 Beijing CBD $500
8 Xinjiekou, Nanjing $470
9 Bourke St, Melbourne $422
10 Orchard Rd, Singapore $421