An influx of 1.1 million mainland visitors during the five-day May Day holiday helped lift sentiment in Hong Kong’s retail leasing market, with shop rental transactions expected to remain above 300 in May, according to Centaline Commercial.
Retail units in core districts remain in high demand and are driving spillover interest in fringe areas, said Terry Ho, senior regional sales director at Centaline Commercial. She expects leasing volume and floor area to rise this month due to increased foot traffic and relatively attractive rents.
The city recorded 332 retail leasing transactions in April, down 3.5 percent from March but up 3.4 percent year-on-year. Total rental value reached HK$36.74 million, rising 4.8 percent month-on-month and 15.7 percent from a year earlier.
One notable April deal involved financial firm Futu Securities leasing the former Transformers-themed restaurant The Ark at 38 Russell Street, Causeway Bay, for about HK$1.4 million. The 7,102-square-foot space was rented at an average rate of HK$197 per square foot – about 40 percent above the previous lease, though still 84 percent below the location’s peak rent of HK$8.8 million during the luxury retail boom.
Ho noted that vacancy rates continued to improve in core districts on Hong Kong Island. Central’s vacancy rate fell to 6.66 percent in April, down 0.3 percentage points from March and 1.7 points year-on-year. Vacancy rates in Wan Chai and Causeway Bay also declined, recording 4.57 percent and 5.93 percent, respectively.
In Kowloon, Tsim Sha Tsui and Mong Kok saw marginal monthly increases of 0.08 and 0.04 points, though their vacancy rates remained 2.63 and 0.08 points lower year-on-year, reflecting ongoing absorption of retail space.
STAFF REPORTER
