Hong Kong’s Tsim Sha Tsui has been overtaken as the most expensive retail destination in the world by New York’s Fifth Avenue this year, according to Cushman & Wakefield’s ‘Main Streets Across The World 2022’ report.
Milan’s Via Montenapoleone follows the Asian market, making third on the list. London’s New Bond Street and the Avenues des Champs Elysees were ranked fourth and fifth respectively.
Tsim Sha Tsui main street shops are paying an average of US$1436 per sqft this year, a 41 per cent drop compared to pre-Covid levels.
The report said pegging of the Hong Kong dollar to the US dollar has helped Hong Kong maintain its ranking position in 2022 as other currencies have weakened. Tsim Sha Tsui overtook Causeway Bay in 2020 to become the territory’s most expensive precinct.
The drop in Hong Kong’s retail rent was attributed to the ongoing Covid-19 restrictions in the territory, which caused a drastic drop in international tourists – especially Mainland Chinese travellers – and a slow rebound compared to the US.
“Similarly, other Asia Pacific markets such as Sydney and Seoul, which rely heavily on international tourists, experienced declines in excess of 20 per cent,” Cushman & Wakefield said in the report.
Rents across the Asia Pacific were down by 17 per cent due to border closures, yet the region took a much stricter approach to their international borders than Europe. Meanwhile, America experienced only a 7 per cent decrease in rents on retail main streets compared to pre-Covid levels.
While India has witnessed a strong rebound in retail rents, the recovery has been slower in Australia, Singapore and Japan. Rents in Mainland China remained stable during most of the pandemic but have subsequently fallen over the past year.