Capitol Centre, located on 5-19 Jardine’s Bazaar in Causeway Bay, Hong Kong, is one of the most coveted locations for luxury retail brands. Victoria’s Secret once leased the prime location, but the lingerie brand pulled out early, leaving the 50,000 square-foot space unoccupied. However, after the opening of the Mainland and Hong Kong border, the market has seen a surge in demand for retail space, and CHANEL has now taken over the lease of Capitol Centre’s massive retail space.
The lease signed last month by CHANEL covers the ground floor, basement, and the advertisement space on the exterior of the building, totalling approximately 19,000 square feet. The monthly rent for the space is estimated to be over HK$3 million, or roughly HK$158 per square foot, making it the largest lease transaction since the border reopening and the largest retail lease in Hong Kong in the past three years since the outbreak of COVID-19.
The lease period is three years, from mid-May 2023 to May 2026, with an option for renewal. The annual rental cost for the space is over HK$36 million, adding up to a total of over HK$1.08 billion for the three-year lease period.
Capitol Centre has seen many tenants over the past 20 years, including major brands such as Watsons, Fairwood, and Giordano. In 2010, the U.S. clothing chain Forever 21 secured the space with a rental amount of HK$10.8 million per month, or HKD 211 per square foot, making it the most expensive retail space in Hong Kong at the time. The rental amount was later increased to HK$13.78 million per month, or HK$269 per square foot.
In November 2016, Forever 21 announced that it would vacate the Causeway Bay store in August 2017, and Victoria’s Secret took over the space for a rental amount of around HK$7 million per month, a significant decrease from Forever 21’s rental amount. However, Victoria’s Secret was hit by the COVID-19 pandemic and vacated the space in May 2020, with more than seven years left on its lease. After Victoria’s Secret’s departure, the space remained vacant until last year when Market Place, a supermarket chain, rented the basement for around HK$600,000 per month, or HK$86 per square foot.