Hong Kong retail rents are expected to move into an “early upswing cycle” this year according to a regional real estate market briefing prepared by Savills.
The report details commercial and residential property leasing trends across major Asian markets and as the accompanying tables show, compares occupancy costs of space as well.
It groups major cities by upswing and downswing, late and early, showing that Hong Kong is at the end of its downswing in retail rental rates. Cities currently in early upswing are Manila, Guangzhou, Jakarta and Singapore. Hong Kong is grouped with Taipei, Hanoi, Ho Chi Minh City and Seoul, suggesting all those markets are about to turn.
Savills says regional prime retail rents moved by between a decline of 1.8 per cent in Beijing and an increase of 5.9 per cent in Guangzhou last year.
“Strong local retail consumption growth of 9.5 per cent year on year in the second half of the year following 10.5 per cent in the first half of the year supported the Guangzhou leasing market, while prime shopping malls began to re-position and upgrade, focusing more on entertainment and food & beverage,” said Savills in a brief commentary.
“Again, Hong Kong’s prime shopping mall rents are considerably ahead of all other Asia-Pacific markets and are expected to move into an ‘early upswing’ cycle this year.”
Savills says economic growth across Asia-Pacific continued to picked-up moderately in the second half of last year and the International Monetary Fund estimates that the “Emerging and Developing Asia” economies grew by 6.5 per cent over the year as a whole while China grew by 6.8 per cent and Japan’s economy grew by 1.8 per cent last year, from 0.9 per cent in 2016.
“The improving global economic outlook and an accommodative monetary policy created momentum for business expansion,” said Savills.