As rent increases, retail commerce slows, and space becomes scarce in Hong Kong’s four primary shopping centers, many companies are looking to take their businesses to Hong Kong’s New Territories.
The New Territories have a large enough customer base, but more important, one with strong spending power.
Maureen Fung Sau-yim, the general manager of Sun Hung Kai Real Estate Agency, said that retailers have begun to look at Tuen Mun, Yuen Long, and other areas along the New Territories railway as viable areas for new stores.
Brands like H&M have taken to setting up shop on the outskirts of the city, in fact, their newest store in the Tai Po Mega Mall boasts 20,000 sqft (it will be their largest store in the northeast New Territories).
Food and Beverage companies have been even more eager to move than retailers. Evelyn Suen, the assistant general manager of leasing at SHKP told South China Morning Post, “Since the retail rent in the core shopping areas is high, the food and beverage operators have to bear higher investment risk. But the operating cost in regional shopping malls would be lower and the shopper traffic is high, which has attracted many operators to open restaurants there.”
Michele Woo, the executive retail director at Cushman & Wakefield said that retailers moving to the New Territories have found the decision profitable. The new towns can offer over 10,000 sqft. (the minimum square footage international brands are looking for), lower rent, comparable shopper traffic, and customers with considerable spending power.
While many brands were initially weary about moving their stores out of central Hong Kong, Fung said that the benefits are quickly becoming evident. “I brought some retailers to visit the shopping malls in Yuen Long and Sheung Shui a few weeks ago. They were surprised by the busy shopper traffic. It is now easier to promote the regional malls to them.”
image credit: gov.hk