Hong Kong and Singapore retail fortunes pick up, but Lion City could win in the long-term
- Hong Kong residents fill their shopping trolleys and tummies in Shenzhen, while Singaporeans hop across to Johor Bahru as they make the most of cheaper prices
- Retail rents rise at a faster clip in Hong Kong than in Singapore in the first quarter, but the city state’s strengthening tourism could underpin rental growth
Hong Kong and Singapore face extensive retail leakage, with residents in Asia’s top financial hubs preferring to shop and dine across their borders – Shenzhen for Hongkongers and Johor Bahru for Singaporeans – where they get more bang for their buck.
Analysts expect the trend to persist, calling it a “new normal” in the case of Hong Kong, and one that is going to become increasingly significant in Singapore.
In the long-run, Hongkongers’ spending on the mainland is likely to pose more challenges to the city’s retail sector, they added, as Hong Kong’s tourism has yet to fully recover.
“Both markets have their own good and not-so-good things,” said Anshul Jain, CEO for India, Southeast Asia and Asia-Pacific (Tenant Representation), at Cushman & Wakefield. “[But] the Singapore market in the [extremely] short term is more attractive than Hong Kong.”
Besides, Singapore has become a bigger market for Asia, thanks to the rising affluence of Southeast Asian countries, he added.
