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What’s on Sale?
Hong Kong is already a shopping haven but developers still continue to build shopping malls. Here are some of the newest
| Text : Andrea Zavadszky |
A regular visitor could be excused for thinking there is more shopping
mall space per head in Hong Kong than anywhere else in the world. However, for sophisticated shoppers and marketers, the ball has just started to roll with the recent openings of three massive malls in Tsim Sha Tsui, the renovation of the World Trade Centre in Causeway Bay, and the “contemporisation” of Pacific Place in Admiralty.
Each has its own target clientele. While some appeal to high-income or middle-class shoppers, some target the younger crowd. Shopping malls in Hong Kong continue to attract with their own square feet 28 branded stores raking up. “The retail business is transient it comes and goes,” says Wong.” But the value of heritage buildings can only increase with time.”
When it comes to choosing tenants, the developers looked for the “missing pieces” on Canton Road. Then they looked for synergy, rather than competition with Harbour City. Positioned as a tourism project, 50 percent of shoppers are from mainland China. Its management predicts that sales willgrow by 10 percent this year.
If 1881 Heritage appeals to affluent mainland gimmicks, themed shops, special cultural events and unparallel shopping experiences.
“The malls have to have a clear positioning,” says Resina Wong, director of Cheung Kong Real Estate, the developer of 1881 Heritage. “Some are smaller in scale, while some have different natures and business models.”
With its grand opening held in November 2009, 1881 Heritage is a HK$1 billion revitalisation project located on the site of the 120-year-old former Marine Police Headquarters development. The historic building features fine-dining restaurants with al fresco seating and 130,000 shoppers, iSquare in Tsim Sha Tsui appeals to a younger, local crowd. Covering approximately 560,000 square feet of retail space, its modern “stacked box” design and curtain walls create a themed conceptual interactive art display.
Most of iSquare’s retail brands are new to Hong Kong. But what makes it a destination is the plethora of restaurants in the mall: 35 per cent of the space is reserved for dining options. Not only that, there’s a beauty centre, five cinema houses and Hong Kong’s first digital iMax cinema.
Since the management wants to engage all age groups and families, 50 percent of the mall caters to high- and middle-income locals, 35 percent to mainland Chinese and 15 per cent to overseas tourists. iSquare’s competitive edge is based on its excellent position, being the only mall in the area right over the MTR station.
Christine Chan, marketing manager of Associated International Hotels, says: “We don’t think there is an oversupply of shopping malls in the Tsim Sha Tsui area. They all target different markets and different audiences. They all have a synergy effect, driving traffic to Tsim Sha Tsui for positive competition.”
Meanwhile, Hong Kong’s first art mall K11’s unique selling proposition is a permanent exhibition mostly made up of local artists’ works. Situated on Nathan Road in Tsim Sha Tsui, this seven-storey mall invested nearly HK$3 billion in a 340,000-square-foot space. It has roughly 100 shops and a gourmet tower. Traffic will heavily rely on guests staying at the Hyatt Regency nearby and residents of luxury property development The Masterpiece.
Another mall which has strong pulling power among yuppies is the World Trade Centre in Causeway Bay. Renovated in April 2009, its management spent HK$200,000 to increase the retail area by 160,000 square feet to 280,000 square feet. According to Fiona Chung, deputy general manager for the leasing department of Sun Hung Kai Properties, the number of tenants has increased from 64 to more than 80.
Since its improvement, it has attracted 50,000 to 60,000 daily shoppers-70,000 to 80,000 on public holidays. The per capita spending growth between the first quarter of 2008 and 2009 was 12 per cent, with total revenue of HK$730 million. Post-renovation rentals have risen by 18 percent, bringing in an annual rental income of HK$200 million for SHKP. Chung says that the company will be spending HK$9.35 million on large-scale promotional activities, introducing even more shopping and leisure elements and promotional activities into the mall in the near future.
Swire’s Pacific Place mall is changing its interior and exterior design, upgrading its facilities and creating new lifestyle offerings. The first phase was completed in November 2009. Says Senior Portfolio Manager Chris Heywood: “The programme represents an investment of more than HK$1.5 billion, which has been Pacific Place’s single largest transformation since the opening.”
The regeneration of shopping malls, coupled with increased supply, will contribute to an even more diverse retail market. Says Heywood: “We think the increase in supply will increase competition in the short term, especially for players in the TST area, [but] the diversification of malls is healthy for the retail industry in Hong Kong as a whole.”
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