Influx of bridge and rail visitors from mainland China could boost retail leasing in Hong Kong, say experts

On Saturday, 103, 231 mainland Chinese visitors crossed the Hong Kong-Zhuhai-Macau Bridge on their way to the city, according to the Immigration Department, and this has led some market watchers to believe that an influx in tourists will rejuvenate Hong Kong’s retail leasing sector.

The districts expected to benefit include Tsim Sha Tsui and Tung Chung, and the sectors that could report a surge in sales include food and beverage, pharmacies and health care.

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“With boosted foot traffic and stronger demand, the rents in nearby districts in Hong Kong, such as those in Tung Chung and Lantau Island, are destined to increase in the coming few months,” said Lawrence Wan, senior director of retail at CBRE Hong Kong.

Retailers of cosmetics, health care items, electronics and watches and jewellery, which are oriented towards tourism as well, did their bit to boost leasing activity in Hong Kong this year, said Wan. And with this infrastructure in place, they now stand to gain from increased visitor numbers from the mainland.

But whether this increased traffic can translate into sustainable growth in rents and drive sales is yet to be seen.

“If the profit is good, this will be reflected in the turnover rents of landlords. In addition, it will take at least six to 12 months to find out if the benefits are for the long term, given the transport operations have stabilised by then,” said Cathie Chung, Senior Director of Research at JLL.

By 2020, another 420,000 mainland tourists will arrive in Hong Kong every year, as a result of the bridge. And with the completion of the Express Rail Link, an additional 2.1 million mainland visitors are now expected in Hong Kong every year, according to JLL.