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These articles below can also be found in the 1 - 15 July 2010 issue of Square Foot magazine:
To view the Interactive Squarefoot eMagazine
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Top Shops
Causeway Bay’s retail space holds on to its global premium status
| Text : Elizabeth Kerr | Photo : Cato Sze |
When you think of prestigious retail spots a few places instantly spring to mind: The elegant Champs Élysées in Paris; the tightly nestled shops of Oxford and Bond streets in London; perhaps the glass and chrome of Tokyo’s Ginza district; the celebrity magnet that is Rodeo Drive in Beverly Hills. But would you honestly include unassuming Russell Street in Causeway Bay in that company? The answer’s irrelevant, as the Colliers International Spring 2010 Global Retail Highlights report places Russell at the top of the list for Asian storefront rental rates and third globally in a survey of 127 locations worldwide.
Paris is number one, with average rents sitting at nearly US$1,256 per square foot, up 2 percent over 2009. New York’s Fifth Avenue drops down to number two ($1,250, down 10 percent). The rest of the top five includes Bond ($1,174, up a whopping 50 percent) and Via Monte Napoleone in Milan ($929). Hong Kong sits at just over $1,200 — around HK$9,300 — an increase of just over 1 percent.
Sydney’s Pitt Street Mall clocked in at number six and Ginza sat just outside the top ten. Also among the top 50 in Asia were Singapore, Delhi, Shanghai and Beijing. For the record, the most economical spots in which to open a store according to Colliers’ list were Bakersfield, California ($18), Boise, Idaho ($20), Riga, Latvia and Klaipeda Lihtuania (both $22) and Reno, Nevada ($24).
So what’s with the attraction to little old Russell Street — which is home to decidedly non-luxury international brands such as Circle K, Levi’s, The Body Shop and Kiehl’s? How did a wet market transform itself into a global retail powerhouse? “Times Square definitely had an impact. [When it] opened in 1994 it wasn’t that well received … it was the first of its kind in vertical retail. Back then we were used to department stores; even Sogo was only five floors high,” explains Helen Mak, Colliers International’s director of retail services in Hong Kong. But gradually things started to change: Times Square gained traction for retailing, Emperor Watch and Jewellery kicked off the high-end trend by taking a corner storefront, Lane Crawford took up the luxury goods mantle and an MTR exit opened up. “The critical turnaround came after SARS, because of the relaxation of the individual tourism scheme for Mainland visitors … If they were looking for electronics or cosmetics, they were looking for 10 cameras — for a sister, brother, mother father,” Mak reasons, and that multi-tasking applied to all luxury products. Once Emperor opened shop, it opened the floodgates. Sheer volume of consumer traffic has solidified Russell’s position as a so-called high street. It’s taken 15 years, but Russell benefited directly from increased tourist purchasing.
As in Paris, Manhattan and London, landmarks draw crowds, and “Times Square is a landmark. There’s Times Square Shanghai, Times Square Beijing … and Russell Street is a hub,” Mak states. It’s also time-effective and offers tourists in town for a limited number of days the convenience of efficient, one-stop shopping (akin to cruise ship travellers spending a few hours in the concentrated Ocean Terminal). Colliers projects 10 percent growth in street level retailing over the next year, and Hong Kong experienced “a record high of retails sales turnover in April, and over half of that came in from Mainlander spending,” Mak points out.
All this luxury begs the question as to how long the smaller independent retailers and restaurant operators are going to be able to hang on. Probably not much longer. When redevelopment inevitably happens — “asset enhancement” as Mak puts it — the remnants of Russell’s pre-Times Square days are likely to get pushed out by international retailers (many of whom are cautiously eyeing expansion) that can afford Russell’s rates. Development cycles can be slow, and it could be years before leases expire and the local Chinese medicine shop gets to the stage where it gives in and moves on. Because at HK$400 or $500,000 a month … that’s a whole lot of medicine.
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