Hong Kong and Singapore face extensive retail leakage, with residents in Asia’s top financial hubs preferring to shop and dine across their borders – Shenzhen for Hongkongers and Johor Bahru for Singaporeans – where they get more bang for their buck.
Analysts expect the trend to persist, calling it a “new normal” in the case of Hong Kong, and one that is going to become increasingly significant in Singapore.
In the long-run, Hongkongers’ spending on the mainland is likely to pose more challenges to the city’s retail sector, they added, as Hong Kong’s tourism has yet to fully recover.
Besides, Singapore has become a bigger market for Asia, thanks to the rising affluence of Southeast Asian countries, he added.
But so far that has not affected retail rents in both cities. First-quarter rents in Singapore’s prime areas inched up 0.6 per cent, compared with the preceding three months, according to JLL.
Hong Kong fared slightly better, with rents for high street shops rising 1.7 per cent and prime shopping centres by 0.7 per cent in the same period, according to the property consultancy. It was, however, the slowest growth in the last four quarters, JLL data showed.
Before the pandemic, tourist spending in Hong Kong made up at least 30 per cent of the overall retail segment, according to data cited by Jain. And not only have mainland tourists to the city declined, but their spending has also decreased, he noted.
Source: SCMP
