| PRESS RELEASE
For immediate release: July 9th, 2002 Are Retail Property Investment Strategies Determined By Consumer Spending Patterns? July 9th, 2002 – According to Government figures, the total volume of retail sales in
Hong Kong has continued to decline and since the end of May 2002, this value has
fallen by 5.9 per cent to HK$15.5 billion on a year-on-year basis – the year’s sharpest
decline. During the first five months of this year, the retail market has witnessed a 23 per
cent decline to 636 transactions as compared to the same period last year. Does this
mean that the retail investment environment is closely linked to consumer spending
patterns? Colliers International’s latest in-depth research report on the retail sector has identified
that transactions of HK$20 million and above have seen a gradual increase of over 26
per cent to 39 transactions. Of this, 54 per cent involve shopping centers as opposed to
high street shops. However, it is interesting to note that within this category, the number
of decentralized shopping center transactions has outgrown the traditional shopping
center transactions such as those in Central, Causeway Bay, Tsim Sha Tsui and
Mongkok. Research Manager at Colliers International, Mr. Simon Lo explains, “Investment
opportunities for en-bloc shopping centers are rare as developers often hold these to
generate attractive rentals. As a result, smaller-scale decentralized shopping centers in
local areas are available.”
According to the Colliers report, at the end of last year, there was a total of 98 million sq
ft of retail space in Hong Kong. Decentralised or localised shopping centers are those
classed under 150,000 sq ft and would be the shopping place for households living
within close vicinity to buy daily necessities. The analysis reveals that spending on luxury
items has declined by 2.7 per cent year-on-year in the first quarter of this year. Similarly,
the sales of motor vehicles have fallen by 22.9 per cent in the same period. However,
household spending has increased by 0.9 per cent. Mr. Lo adds, “Discounted retail outlets have also expanded as well and major
supermarkets chains, beauty and hair salons, laundry services and chemists and drug
dispensaries have also grown. Certainly, retail property investment is linked with
consumer spending patterns…”
The Government’s strategy to shift Hong Kong’s population to the north of the region,
especially amongst the new towns in the New Territories has fueled the increasing
number of shopping centers in these areas, where the population has increased by 15
per cent since 1996. Similarly, retail space has grown by 17 per cent since 1996, which
is particularly evident in Tseung Kwan O, Tin Shui Wai and Tung Chung. It is anticipated
the population will increase between 26 – 126 per cent in these three new towns in the
next 10 years. “Investing in such shopping centers has been fetching around 9 per cent yield return
representing an average 8.2 per cent above the market. These opportunities could
provide purchasers a low-risk investment as well as a premium rental return.”
-end-
About Colliers International
Colliers International is a global partnership of independently owned commercial real
estate firms. In Asia Pacific, Colliers International is wholly owned by the Colliers
Macaulay Nicolls (CMN) Group of Companies, which is the largest member of Colliers
International. By instilling in all its employees a culture of Knowledge, Colliers
International is one of the leaders in providing property knowledge solutions and
services to its clients. The organization’s 6,600 employees span the world in more than
200 offices in 51 countries. In 2001, on a worldwide basis, Colliers managed 442 million
square feet, with revenue of US$800 million. This information is distributed for Colliers International by: Carol T W Wong
Regional Marketing & Communications Manager
Corporate Marketing
Colliers International
Tel 852 2822 0736
Fax 852 2868 5275
Email Carol.Wong@colliers.com
www.colliers.com |