Dominic Chung

Concrete Analysis | Why Hong Kong’s community malls are crucial to the future of the city’s retail sector

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Hong Kong’s community malls recently have performed far better than their larger counterparts as locals depend on them for their day to day needs

Link Reit said that the occupancy of its Hong Kong retail assets stood at 97.7 per cent and rental collection at 98 per cent for the year ended March 2022

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Crowds throng a shopping mall in Kwun Tong during the Good Friday holiday in April. Hong Kong’s large shopping malls have felt the pinch from the lack of overseas and mainland Chinese visitors. Photo: Xiaomei Chen

Dominic Chung

Published: 12:00pm, 12 Jul 2022

With Hong Kong holding the world record for the highest commercial density – one mall per square mile – it is no surprise that the range of shopping malls in the city is extraordinary.

Spanning everything from small arcades that locals rely on for their groceries and other daily needs to large complexes that supply retail opportunities to suit every wallet, they can sometimes double up as leisure and entertainment venues with cinemas and ice rinks, for example. As such a feature of Hong Kong life, residents have been flocking to malls for decades.

High-end malls have usually been able to rely on the steady influx of overseas travellers as well as those from mainland China. However, since the social unrest of 2019 and the onset of Covid-19 the following year, it is the local community shopping centres at the heart of residential areas that have come into their own. They have weathered the downturn over the last three years that has battered luxury retailers.

While local consumers have always been an important part of Hong Kong’s retail sector, their value rose even further when the flow of tourists and shoppers from mainland China into the city dried up. Their scarcity saw retailers having to rely almost exclusively on local consumers for their sales.

Hong Kong’s retail sector has taken a hit due to the lack of tourists. Photo: May Tse

The advantages of Hong Kong’s local community malls are that they are part of their area – they are not situated in out-of-town locations that people need transport to access – and they stock items that people rely on to live no matter what the economic conditions are.