April suffers sharpest drop in Hong Kong retail property segment

Slowdown in tourist arrivals partly to blame.

The slowdown in tourist arrivals along with a high base of comparison contributed total retail sales declining by 9.8 percent y-o-y in April.

According to the quarterly summary on the Hong Kong property market (2Q14) by JLL Hong Kong, this was the sharpest year-on-year drop in a month since February 2009 – trimming year-to-date growth to 0.7 percent y-o-y.

The report also said that with retail sales slowing, retailers adopted a more pragmatic approach towards real estate decisions though demand for shops in prime locations along High Streets remained intact.

Here's more from JLL Hong Kong:

After a fast start to the year, total tourist arrivals grew by a more moderate 10.9% y-o-y in April-May.

Tourist arrivals from Mainland China also slowed, growing by 13.9% y-o-y in April-May after growing by 20.0% y-o-y in 1Q14.

Despite a slowdown in leasing activity and rental growth, investment volumes recorded a slight pick-up in 2Q14 with larger sized premises in non-core locations with upgrading potential drawing the greatest interest.