At the average luxury retail rent of GBP17,132 per square meter per year in the fourth quarter, Hong Kong exceeded second-place New York’s Madison Avenue by 9.6% and third-place London’s West End by 11%, according to a recent report by property services firm Savills.
Milan’s Via Monte Napoleone, which held the top spot in 2023, fell to the fourth position on the ranking, followed by Tokyo.
The city’s dense population of high-net-worth individuals is “starting to garner renewed interest” from luxury brands looking to expand in Tsim Sha Tsui, said Thomas Waterhouse, Savills’ Hong Kong director of retail, as reported by South China Morning Post.
Savills predicts the area will maintain its top ranking in 2025.
Hong Kong had more than 42,700 individuals with a net worth exceeding US$10 million last year, ranking it the world’s 10th largest wealth hub, according to a Knight Frank report.
This group represented 2% of the global 2.34 million high-net-worth population.
Hong Kong’s government has actively attracted wealthy investors, with its new investment migration scheme drawing 910 applicants by February, projected to generate HK$27 billion (US$3.5 billion) in investments.
Savills noted that prime retail rents, now over a third lower than 2019 levels, are “also helping” to boost luxury retail leasing.
“While Hong Kong saw improved levels of activity, they were still below pre-pandemic activity.” A luxury market recalibration is ongoing, with store upsizing in key locations gaining momentum after years of contraction.
In November, property consultancy Cushman & Wakefield ranked Tsim Sha Tsui as the world’s fourth priciest shopping district in 2024, with rents at US$1,607 per square foot, trailing Milan’s Montenapoleone, New York’s Fifth Avenue, and London’s New Bond Street.
Hong Kong’s retail sales fell 13% year-on-year to HK$29.4 billion in February, marking a 12-month decline, with a 7.8% drop in the first two months of 2025, as locals spent heavily in Shenzhen and other regions, according to the Census and Statistics Department.
Concerning global retail rents in the first quarter, Savills reported that the biggest growth region in store count terms was the wider Asia Pacific region, excluding China.
The region accounted for 24% of all new openings worldwide, accelerating past North America and Europe.
Excluding China, Japan remained the biggest market for new openings in the region, with Savills research pointing to the strength of domestic and visitor spend, particularly that coming from China.
Mainland China, meanwhile, continued to be a powerhouse, responsible for 40% of all new global opening, reflecting a 10% year-on-year increase, Savills data shows.
But Kelly Cheng, Savills’ cross-border lead, said that China’s global share of luxury outlets have contracted.
“This data masks the fact that several major brands have been closing stores in China while consolidating and focusing on key markets.”
