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Savills: Hong Kong Retail Rents to Continue Dropping in 2021

Hong Kong’s retail landlords are bracing for a further squeeze on the lowest rents in more than a decade as tenants seek relief in the aftermath of the city’s worst Covid outbreak.
The scene in busier times in Hong Kong's Central District. Shutterstock (Shutterstock)

Prime street shop rents and shopping centre rents in Hong Kong will fall by 2 to 5 percent this year, according to research from real estate consultancy, Savills.

It’s not all bad news, though, with an anticipated bounce back of international travel over the next three years, as the pandemic wanes and vaccinations become widespread, likely to help Hong Kong claw back some ground when it comes to retail sales.

Visitor arrivals to Hong Kong evaporated in 2020, dropping nearly 93 percent over the first ten months of the year. Savills predicts the return of tourists and their shopping spending will fuel growth in total retail sales of between 5.5 percent and 15.1 percent from 2021 to 2023.

This will lead to prime street shop rents to rise between by 7 to 10 percent in 2022 and a further 20 to 23 percent in 2023, while shopping centres will recover by 5 to 10 percent per annum over the same period.


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