- Don-Alvin Adegeest |
Hong Kong's inflated retail rents and high mark-ups on designer goods haven't dented its image as a global shopping mecca.
According to the latest CBRE report, Hong Kong remains firmly at number 6 as a preferred retail destination. 24 percent of international retails see Hong Kong as a key market for expansion.
In its seventh edition of How Active Are Retailers Globally? China is the top target market in APAC and the fourth most popular globally (27 percent). Japan follows in seventh (22 percent) and Singapore ninth (21 percent).
Most APAC markets saw increased interest for 2016 vs 2015, with interest in Hong Kong increasing 2 percent, and interest across Southeast Asia surging by more than double that of the previous year. However, interest in China and South Korea softened somewhat, the report noted.
“Hong Kong will remain a desirable market for retailers, particularly as it continues to serve as a popular shopping destination for mainland Chinese tourists,” said Joe Lin executive director of Retail Services for CBRE Hong Kong.
“The main difference in current tourist consumption patterns is that there is shift from luxury to mid-range brands. This structural trend is forcing luxury retailers to consolidate their footprint, leading to a drop in rental cost in prime locations and therefore opportunities for non-luxury retail brands,” he noted.
The survey’s findings also show that 83 percent of brands suggest their physical store expansion plans for 2016 will not be affected by the growth of e-commerce. Meanwhile, from a retailer perspective, only 22 percent of the brands are concerned about stiff competition from online retailing as a threat to their business.
Europe remains top of the list for desirable retail destinations
European countries dominate the target for retail destinations this year, with Germany retaining its number one position globally (35 percent) followed by France, 33k percent and the UK, 29 percent.
The CBRE monitors retailers' appetite for global expansion and examines the issues facing retailers in today’s market. The reports also examine the global expansion ambitions of retailers based in Europe, Middle East and Africa, the Americas and Asia Pacific, along with the number of stores they are looking to open and the key markets being targeted.
Interested in more reads on retail rents? Read: 69 Louis Vuitton bags: What retailers should sell to cover rent on the most expensive streets
Photo: Causeway Bay, Hong Kong: Home to H&M