Hong Kong’s Tsim Sha Tsui district commanded the most expensive rental fees among the world’s retail markets last year, as luxury brands from Cartier and Dior to Tiffany kept their flagship stores running on the Kowloon peninsula, according to Savills.
Prime retail rent in TST, as the area is called, was £17,132 (US$22,976) per square metre per annum in the fourth quarter, according to Savills’ report. That was 9.6 per cent higher than New York’s Madison Avenue, at £15,559 per sq m per year, and 11 per cent greater than Bond Street in London’s West End, at £15,333 per sq m per year.
Hong Kong’s high concentration of high net worth individuals (HNWI) is “starting to garner renewed interest” among luxury brands to expand their footprint in the city, especially in TST, said Savills’ Hong Kong director of retail Thomas Waterhouse. The report said the district is likely to retain its pole position in 2025.
Hong Kong had 42,715 people last year who had a net worth more than US$10 million, according to a Knight Frank estimate, which made the city the world’s 10th largest wealth hub last year. The well-heeled set, which made up 0.6 per cent of Hong Kong’s population of 7.5 million people, accounted for 2 per cent of the worldwide class of 2.34 million HNWIs, Knight Frank said.
The city’s government has also been aggressive in luring more investors and wealthy individuals to its shores. As of February, the new investment migration scheme had attracted 910 applicants and was expected to bring in HK$27 billion (US$3.5 billion) in investments.
The rebase of prime retail rents in the city, which are more than a third lower than 2019 levels “is also helping” to revitalise the luxury retail leasing momentum, Savills said.
Canton Road in Tsim Sha Tsui during the Lunar New Year holiday on 16 February 2024. Photo: Jelly Tse.
