PRIME SHOPPING DISTRICTS

Retail properties in the Causeway Bay shopping area are well known for their prime rent, which is among the top three in the world. In 2010, the average rent for prime retail spaces in Causeway Bay is as high as HK$783 per square foot, just shy of the highest rent in the world: HK$816.3 per square foot on Av. Des Champs-Elysees, Paris and HK$812.5 per square foot on Fifth Avenue, New York City. It is literally as precious as gold. Obviously, it would be difficult for ordinary retailers to establish themselves in this area, yet brand retailers are eager to pay hundreds of thousands or even millions of dollars for prime shops in this core shopping area to secure good exposure and build brand identity, to ready themselves for the international and China markets, or to capitalize on inbound visitors from China under the Individual Visit Scheme. As a result, prime retail rents in areas like Yee Wo Street, Russell Street, Lee Garden Road and Percival Street are constantly on the increase, spawning many of the most expensive retail properties in the market. Retailers in Causeway Bay mostly cater to the medium- to high-income groups. An increasing number of boutiques and specialty brand name stores target especially the affluent. Many stores boast a unique character, and specialty streets are currently in the making.

Retail rents are staggeringly high on Russell Street, yet because of its prime location and storefronts facing Times Square, many mid- to high-range international brands are drawn to Russell Street, giving it the name “Brand-name Street”. Boosted by the ever-increasing visitor arrivals and the prevailing effect of the Individual Visit Scheme, retail businesses on Russell Street are thriving. Many veteran investors have positive outlooks on this prime area, and are still aggressive in acquiring properties there despite the rising prices.

Under the effect of the Individual Visit Scheme, the number of luxury watch retailers on Percival Street has increased tremendously, making it the “Watch Street” where any imaginable watch styles can be found. As the telecommunications businesses moved out, brand name watch retailers moved in, and they now occupy a high ratio in this area. There are now over 10 watch retailers, many of them of luxury watches, who take up the high traffic section of Percival Street near Russell Street where rent has hiked, in some cases even doubled.

There is a vast variety of retail stores on Lee Garden Road: restaurants, fashion boutiques, snack shops, optical shops and convenience stores to name a few. The section of Lee Garden Road between Kai Chiu Road and Lan Fong Road has the highest traffic in the area, where each retail property transaction is in terms of tens of millions of dollars. The area is therefore home to prime retail properties fetching the highest value. Many veteran investors also have their stakes there.

East Point Road is the main drag of the shopping area around Sogo Department Store. The road goes through the Jaffe Road exit of World Trade Centre, the East Point Centre section of Lockhart Road, Great George Street and Yee Wo Street, linking the north side of Causeway Bay with the dense traffic core. There is a large concentration of trendy stores on East Point Road which young people frequent.

The section of Paterson Street between Gloucester Road and Kingston Street is known as the focal point of trendy fashion, in particular the Kingston Street and Paterson Street intersection where many such popular brands are situated. Most of the shops are in the mid- to high-price range, drawing office ladies and trendy crowds. Paterson Street also has an extraordinarily high number of stores upstairs which sell unique merchandises appealing to the yuppies.

Pak Sha Road and Lan Fong Road, which links to Lee Garden Road, maintain a quiet ambience in the midst of commotions. In recent years, many Japanese and Western restaurants are moving into this area, bringing in a lot of traffic, and long queues outside the restaurants are a common sight. With the increasing traffic flow, property transactions are always on the rise.

Only a couple of blocks away from the mega shopping mall Times Square, Yiu Wa Street still exudes a quiet vibe. It has morphed in tandem with the Causeway Bay into a cluster of specialty restaurants and bars. Albeit a little on the quiet side during the day, Yiu Wa Street wakes up as night falls – the later the merrier – and sees many bars frequented by local movie stars. As brand name stores scramble into Causeway Bay, retail rents in the Pak Sha Road and Yun Ping Road areas have been on the rise, and vacancy is never a worry for property owners. Some owners have even set up a “pre-lease service”, i.e. the new tenant can sign a pre-lease before the existing tenant moves out. This type of arrangement is becoming more and more common, reflecting the high demand for retail space in the area.