Hong Kong regained the first place in renting
According to some reports, Hong Kong retail rents have recently re-emerged in the world’s first, reflecting that the decline in retail rents has eased and even bottomed out. At the same time, the situation of global traditional shops being threatened by online shopping has gradually become apparent.
Recently, DTZ has released the latest “Global Streets” report, which is an annual survey of the world’s major retail locations. Hong Kong has always been one of the world’s highest rented areas. The latest Causeway Bay Russell Street shop rents about 1,736 yuan per trip, following 2013. The most expensive part of the world. The second place is Fifth Avenue in New York, USA, with a lease of $1,463, while the third is New Bond Street in London, England, with a lease of $1,134.
New York shop rents a decline, Hong Kong replaces the top spot
The report reflects two phenomena. First, the downsizing in Hong Kong is nearing completion. With the change in the consumption pattern of the Mainland, the rent in the core area has dropped sharply after peaking in 2013. In just two to three years, it has fallen sharply by 30%. Above, the callback of individual lots has reached 50%. The report shows that the rent of Russell Street has dropped by about 2% year-on-year. The change is not large, indicating that the rent is nearing the bottom. As the average tenancy of a commercial shop is 3 years, when the merchants renew their contracts next year, the old tenancy is signed in 2016. At that time, the rent has been adjusted. In other words, the peak rent has almost completely disappeared, so the rent has dropped significantly. Not too high, it can be expected that when individual merchants renew their rents next year, there may be an increase in rents.
Secondly, Hong Kong’s return to the world’s highest rents this time is not based on “self-strength”. It turned out that the rivals were “successful”. Russell Street rented $1,771 in the second quarter of last year. This year’s rents also fell by about 2%. However, last year’s champion New York Fifth Avenue, the rent fell by as much as 25% year-on-year, so the top spot was replaced by Causeway Bay, instead of the Causeway Bay rent. Asked DTZ, who issued the report, why is the most core renting in the United States, which has fallen by as much as 25% a year? According to a spokesperson of the bank, the vacancy rate of the Fifth Avenue store in New York is 20% higher. According to the research, the prevalence of online shopping has seriously affected the traditional shopping patterns in Europe and the United States. The business of shops is not as good as before, and the interest in renewing rents of merchants has also declined. The market fell sharply, and even the online store replaced the physical store, so even in the first line, there is still a situation of the shop.
Online and offline complementary shops fight online shopping
For the online shopping threat, the temporary rent for Hong Kong shops may not be obvious. The rent in the core area of Hong Kong is mainly supported by the arrival of mainland tourists. The retail sales of Hong Kong have performed well this year, which has improved the rental situation in the core area. For example, in the report of Russell Street, in the past few years, when the retail was quiet, there were also Jipu shops in the most prime locations, and the Lishi closed store took the opportunity to enter the wonders of the short-term renting of Russell Street. It is understood that the last shop in Russell Street is also rented out a month ago, more or less reflecting the improvement of the rental market, retailers are still interested in renting.
In addition, the biggest difference between Hong Kong and Europe and the United States is that Hong Kong is relatively small, shops and shopping malls are everywhere. We go to work every day to go through the shops. Therefore, compared with the local Europe and the United States, online shopping has not yet fully spread to overwhelming. Traditional consumption patterns.
Of course, it seems that there is no threat to traditional shops in online shopping. It seems to be a bit of a kind. Therefore, local retailers also have a contingency strategy to complement the online shopping experience by complementing online and offline and increasing the customer experience elements in the store.