Prime street shop rents to drop as much as 15% in 2016

Retail environment expected to remain challenging.

It has been noted that Hong Kong's hallenging retail environment is likely to persist next year due to diminishing inbound tourist arrivals.

According to a research note from Knight Frank, it expects prime street shop rents to drop by 10-15% next year, while shopping mall rents are expected to remain resilient with limited supply.

Paul Hart, Executive Director, Greater China at Knight Frank, expects that the high-end retail market will remain sluggish in 2016, thanks to the reduced tourist spending in this segment of the market as a result of a combination of factors including the strong Hong Kong dollar.

However, he remains positive on the mass retail market which he expects to perform better as domestic consumption remains strong.