High-street shops in HK see 'strongest' rental growth since 2013

Rents rose 1.2% quarter-on-quarter in the second quarter of the year.

Landlords in high-street shops are becoming more confident as sales rebound driving rents to rise by 1.2% in the second quarter (Q2) of the year.

The slight increase in demand, CBRE Hong Kong said, boosted high-street shop rents to increase by 1.2% quarter-on-quarter.

This is the first gain witnessed since Q2 of 2018 as well as the strongest quarterly growth since the fourth quarter of 2013.

“Landlords are regaining confidence gradually as retail sales rebound,” CBRE Hong Kong said in its 2021 Mid-Year Market Outlook.

The gradual relaxation of social-distancing measures helped improve footfall, it added; whilst shopping mall rents were unchanged despite the absence of tourist-related demand.

Moreover, the vacancy rate in high-street shops also fell to 15.4%, the lowest since Q2 of 2020.

The highest vacancy rate drop was recorded in Central after it fell to 9.3% from 16.2% in the previous quarter.

Meanwhile, Tsim Sha Tsui registered the highest vacancy rate at 23.2%, up from 21.7% over the same period.

Vacancy rate in Causeway Bay and Mong Kok both declined to 13.2% and 16%, respectively.