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Retail Expansion Set To Push Up Floor Rents
Source: Bloomberg News |
August 23, 2011, Tuesday
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Print Edition
Print Edition
ABERCROMBIE & Fitch's and Gap's expansion in Hong Kong may help push up shop rents in the Central business district almost 50 percent over the next three years, according to property consultant Jones Lang LaSalle.
The US-based retailers are set to open flagship stores on or near Queen's Road Central by the first quarter of next year. Rolex, the Swiss watchmaker, has agreed to renew the lease for a nearby shop at a monthly rate of HK$2.4 million (US$308,000), or HK$25,800 a square meter, according to the Hong Kong Economic Times.
Hong Kong's street-level shop rents rose 7.4 percent to a record high in the second quarter after retail sales climbed and more tourists from the Chinese mainland visited the city, according to property consultant Colliers International. Mainland tourists to Hong Kong jumped 26 percent to 22.7 million in 2010 from a year earlier, according to the city's tourism board. The figure reached a record of 122,893 daily on April 30 this year.
"The key to retail is foot traffic and exposure," said Tom Gaffney, Hong Kong-based national director of retail at Jones Lang, the world's second-biggest commercial brokerage, who forecast rents in the area will rise as much as 48 percent over the next three years. In Central, he said, "you are seeing these international brands all expanding into one core area and that is going to cause a huge amount of traffic to flood to one location."
The US-based retailers are set to open flagship stores on or near Queen's Road Central by the first quarter of next year. Rolex, the Swiss watchmaker, has agreed to renew the lease for a nearby shop at a monthly rate of HK$2.4 million (US$308,000), or HK$25,800 a square meter, according to the Hong Kong Economic Times.
Hong Kong's street-level shop rents rose 7.4 percent to a record high in the second quarter after retail sales climbed and more tourists from the Chinese mainland visited the city, according to property consultant Colliers International. Mainland tourists to Hong Kong jumped 26 percent to 22.7 million in 2010 from a year earlier, according to the city's tourism board. The figure reached a record of 122,893 daily on April 30 this year.
"The key to retail is foot traffic and exposure," said Tom Gaffney, Hong Kong-based national director of retail at Jones Lang, the world's second-biggest commercial brokerage, who forecast rents in the area will rise as much as 48 percent over the next three years. In Central, he said, "you are seeing these international brands all expanding into one core area and that is going to cause a huge amount of traffic to flood to one location."
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