Rents were broadly unchanged in the last quarter amid softer retail sales and a lack of new lettings.
- The final quarter of 2022 ended on a dull note with little change in market tone.
- Despite attempts by landlords to lease up empty units before Christmas and Chinese New Year, activity levels have remained stubbornly low.
- Relative to street shops, shopping malls are faring a bit better and most report high occupancy as landlords have diligently focused on lease-up rates rather than rents this year.
- For luxury retailers the focus is on shopping malls rather than the high street and as the younger generation becomes a greater force in the retail market, we note a shift away from traditional mainstream luxury towards fresher concepts.
- Given the economic uncertainties and ongoing COVID restrictions, we do not expect retailers and travelers to flood back to the city in the short term.
- We see little to suggest a major turnaround in 2023 and we think that rents will remain largely flat and expect a 0% to 5% rise over the year as a whole.