Chanel rented a two-floor shop in Hong Kong’s prime shopping area Causeway Bay, signing one of the biggest leases since the pandemic.

The luxury brand committed to a three-year lease for the ground-level retail space at Capitol Centre starting in mid-May, according to government records. The records didn’t show the amount of the rent but Ming Pao reported that Chanel agreed to pay more than HK$3 million ($383,000) a month.

The space, right in front of a subway station exit, has a large facade, making it one of the most iconic retail spots in what was once the world’s most expensive shopping street. Fashion retailer Forever 21 Inc. and Victoria’s Secret & Co. had rented the shop before it sat empty during the pandemic.

Hong Kong is seeing a return of tourists after travel restrictions were lifted earlier this year. Visitor numbers increased from fewer than a million in January to almost three million in April, according to the Hong Kong Tourism Board. Retail sales in April reached 92 percent of 2019′s level in the same period.

The city’s insurance sales to mainland visitors also jumped nearly 28 times in the first quarter, about 75 percent of the level recorded in the same three months in 2019.

Chanel is likely to pay just a fraction of the rents borne by previous tenants as rental levels slumped during protests and the pandemic in the past few years. Causeway Bay’s rents in March were just 30 percent of the peak’s a decade ago, according to Colliers International.

While global luxury brands have shifted their priorities and resources out of Hong Kong amid signs that Chinese spenders will increasingly shop domestically, steep discounts in the world’s most expensive real estate market have led to the rare opportunity of grabbing large shopfronts in the city.

As to Chanel, the company is expanding, more than doubling its office space for its London headquarters, underpinned by confidence in the luxury industry’s prospects.

Learn more:

Chanel to Double Capital Investments, Bolster ‘Ultimate Luxury Experience’ as Sales Surge

The privately-held fashion and beauty giant’s sales rose 17 percent to $17 billion in 2022. Private salons for top-spending clients, emerging technologies and a new London headquarters are on new CEO Leena Nair’s agenda.