Overall retail rents in Hong Kong's core locations slumped 9.1 percent quarter-on-quarter (q-o-q) in the third quarter of 2015, the largest quarterly decline recorded since 1998, property consultant CBRE said on Tuesday. Rents in Causeway Bay fell most severely by 11 percent q-o-q, while rents in Central, Tsim Sha Tsui and Mong Kok declined by 9.2 percent, 7 percent and 7.6 percent q-o-q, respectively.
Total retail sales in July and August combined, dropped 4.2 percent y-o-y. Watch and jewellery sales dived by 7 percent y-o-y in July and August combined.
Hong Kong's retail market is at the crossroads as retailers and landlords scramble to adjust their operations and leasing strategies to cope with market changes brought by dwindling mainland visitor arrivals and luxury goods sales.
Global commercial real-estate services provider Colliers International expects street-level retail rents in the city's four prime shopping districts – Causeway Bay, Central, Mong Kok and Tsim Sha Tsui – to drop by 15 percent this year after a full-year decline of 5.5 percent in 2014.
Rents are expected to fall as much as 40 percent this year in Hong Kong's bustling shopping district of Causeway Bay, until recently the world's most expensive retail street, hit by a slowdown in visitors, particularly cash-rich mainland Chinese.
Some landlords are seeking rents as much as 40 percent below last year's peaks, outstripping analysts' forecasts of drops of about 15 percent in 2015, but some retailers say the reduction might not be enough to offset weak sales.
Traditional retailers and consumer goods companies need to change the business strategies quickly in the realities of a "new normaI" in China. International consumer businesses, in particular, must be more flexible and sophisticated with their offline and online propositions to be competitive, according to a new report by OC&C Strategy Consultants.
Thailand's Central Group is quietly negotiating to take over a popular department store in Germany in a bid to enhance its retail brand recognition abroad. An industry source said the deal was expected to be settled in the coming months.
The giant retail group recently announced it would allocate THB10 billion (USD300.2 million) to expand its business in Europe this year through mergers and acquisitions.
Germany is not the first country for Central Group to have a presence in Europe.
The considerable potential of Vietnam's domestic retail market is being actively promoted by large retailers looking to expand their businesses at a faster pace.
The Ministry of Industry and Trade said the modern retail model in Vietnam accounted for a quarter of the national retail value. Vietnam has 724 supermarkets, 132 shopping centres and hundreds of convenience stores. Most of these supermarkets and shopping centres are concentrated in large cities. Meanwhile, sale agents are mainly located in rural areas.
Voylla.com, a jewellery and accessories shopping website run by Bengaluru-based Voylla Retail Private Limited, is planning to set up exclusive offline stores to consolidate its presence in the Indian fashion imitation jewellery industry, said its founder and chief executive officer Vishwas Shringi.
The two-year-old company, which currently has three offline stores, including one in Bengaluru, is gearing up to launch 25 shop-in-shops across the country in tie-up with retail chains like Future Group's Central within the next one-and-a-half year.
2015 is expected to be a challenging year for retailers in Hong Kong, a new CBRE report said on Tuesday.
Hong Kong ranks as the world’s most expensive high-street retail destination, surpassing New York, Paris, London and Tokyo by a substantial margin, according to the latest research from CBRE.
CBRE’s regular quarterly ranking of the world’s prime global retail markets saw little change in the third quarter of 2014, with global and hot-growth markets continuing to lead the rankings.
It said this is the third consecutive year that Hong Kong has ranked top of the global list.
The bricks and mortar experience is still the preferred shopping choice for Hong Kong consumers, according to the latest CBRE consumer survey.
Conducted in August 2014, CBRE’s first-ever Asia-Pacific consumer survey sought to identify current and future shopping trends across the region. Approximately 11,000 consumers were interviewed in 11 major cities, including 1,001 respondents in Hong Kong.