Tsim Sha Tsui hailed as APAC’s most expensive retail strip

Rental rankings saw little shifts despite overall price declines in the region.

Hong Kong’s Tsim Sha Tsui emerged as the most expensive retail strip in Asia Pacific as of Q4 2020, with annual rents hitting $1,607 per sqft, according to a report by Cushman & Wakefield. It is followed by Tokyo’s Ginza and Sydney’s Pitt Street Mall, with rents of $1,223 and $974, respectively.

Rounding out the top five are Seoul’s Myeongdong and Osaka’s Shinsaibashi-suji at $930 and $805, respectively. Making it in the top ten are Shanghai’s West Nanjing Road, Beijing’s CBD, Nanjing’s Xinjiekou, Melbourne’s Bourke Street, and Singapore’s Orchard Road.

The report noted that two-thirds of retail strips in the region saw rental declines in 2020, with Causeway Bay in Hong Kong experiencing the steepest decline at 43%. However, the retail sector in China saw the least disruption in the region, with average rental declines of 5%.

In contrast to the Beijing Central Business District (CBD) which had a 14% decrease in rental in 2020, the Luohu district in Shenzhen saw the largest rental growth of 5%. Despite these changes, there was little change in rental rankings across the region as the top three most expensive cities for retail remain as Hong Kong, Tokyo and Sydney.

“The key market drivers in operation due to COVID-19, namely international border closures, lockdowns and work-from-home practices have been universally felt across the region. As a result, we see little change in Asia Pacific rent cost rankings, at least for the top 10 cities,” said Dominic Brown, Cushman & Wakefield’s head of insight & analysis, Asia Pacific.

Brown noted that Indian markets feature prominently in the other end, taking up the four least expensive spots in the region. In comparison, rents in Tsim Sha Tsui, Hong Kong are nearly 80 times more expensive than Banjarra Hills in Hyderabad.

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Most expensive retail districts by market ranked by Q4 2020 rent (USD/sqft/yr) by Cushman & Wakefield

The report found it unlikely that the retail districts will immediately spring back to pre-COVID performance because of the slow pace of recovery in international travel. However, this does not mean that they will fade into irrelevance.

“The progress made in the roll-out of vaccine programs globally and the gradual return to normalcy will also contribute to the overall recovery of the retail sector,” the report added.

The retail sector is expected to see a greater bifurcation in consumer spending in the near term, with value-oriented concepts continuing to flourish and luxury retail rebounding more quickly.

“Following the 2008 global financial crisis, global luxury retail generally rebounded within a 12 to 18-month timeline. Evidence from China in 2020 supports this view, which should provide a dose of optimism to the luxury sector,” the report added.