Quarter on quarter rises in rents reflect a gradual improvement in sentiment but any clear turnaround will be dependent on the lifting of border restrictions. 

• Sentiment in Hong Kong’s retail market continued to improve in the second quarter supported by rising retail sales.
• The leasing market has shown signs of revival with an increase in activity levels in core areas and stabilised rents. 
• Rents in both the prime street shop and major shopping centre segments have stabilised after 18 months of decline, registering a QoQ growth rate of 0.3% and 1.2% respectively.
• Local consumption will remain the main demand driver over the second half with border restrictions increasingly likely to remain in place and with the rollout of government’s consumption voucher scheme.
• We see increasing opportunity for landlords and retailers in some New Territories districts where population growth is expected to run ahead of retail provision over the next three years according to Planning Department projections.