Hong Kong, home to some of the most relentless Covid restrictions, is struggling with an economic downturn. Hong Kong no longer holds the title of the world’s most expensive retail district as rents fall due to Covid restrictions and visitor restrictions. Visitor numbers plummeted as the border with mainland China closed. Just three years ago, China received a total of 56 million tourists for the year, compared with a peak of 250,000 in 2022.
Manhattan’s Upper Fifth Avenue is now the world’s most expensive street to shop on, according to a survey by commercial real estate firm Cushman & Wakefield Plc. The survey tracks the top retail districts in 92 cities and ranks them by rental value. A 14% increase from pre-pandemic levels, annual rents for Upper Fifth Avenue stores averaged $2,000 per square foot.
Hong Kong’s Tsim Sha Tsui area came in second, while rents in Kowloon fell 41% to $1,436 per square foot. Italy’s Via Montenapoleone followed Hong Kong’s Milan with rents up 9 percent to $1,380. New Bond Street in London slipped to fourth place, with an 11% drop in average rent. According to Cushman & Wakefield, Paris’s Champs-Elysées ranked fifth after an average decline of 18%.
The report further noted that the U.S. has been the most active, with average rents 15% above pre-pandemic levels. In contrast, rents in Asia have fallen by an average of 17% – a consequence of the knock-on effects caused by Covid. While hotel quarantines have subsided, tourists are still subject to a wide range of tests and restrictions. Although Hong Kong lost its No. 1 spot, the retail sector is gradually recovering from the pandemic. Harbor City has opened more than 70 new stores and plans to open about 100 new stores in the mall by the end of this year, including retail and food. Some of these brands include but are not limited to A. Lange & Söhne, LANVIN, Parisine, MALIN+GOETZ and Patek Philippe. This was mainly due to higher than expected growth in retail sales amid covid restrictions.