High street shop rents rise 14.8% YoY in 2023

In 2024, experts expect rents to climb by only 5%-10%.

Rental values for high street shops and prime shopping centres rose 14.8% and 2.7%, respectively, in 2023.

High street shops' rental values are still over 70% below the historical peak in 3Q14, whilst vacancy rates hit the lowest since COVID-19, down to 11.6% by the year-end.

Pharmacy, light refreshments, and beauty and cosmetics sectors are the most active in the leasing market in 2H23.

In addition, the proportion of mainland Chinese brands making their first commerce in Hong Kong also increased from 5% in 2022 to 24% in 2024.

"Looking forward, the retail sector is still set to continue to recover in 2024, although there are downside risks due to domestic consumption dampened by a strong Hong Kong currency and the frequent Northbound travel by Hong Kong people," Oliver Tong, head of Retail at JLL Hong Kong, said.

"We expect the rents of High Street shops will still enjoy higher rental growth in 2024 as most prime shops have been taken up, rising 5 to 10% next year, while rents of Prime shopping centres will climb 0 to 5% only,” Tong added.