• Ziggurat Realestatecorp

Main Street Retail Performance Through A Pandemic

Sectoral performance in real estate is always under the microscope, but it has never been so acutely examined and reported as it has in the past 12 months.



Hong Kong Tsim Sha Tsui


As COVID-19 first spread across the Asia Pacific region and then the globe, bringing with it a global recession, investors and occupiers alike sought not only to limit their exposures but also identify opportunities for growth.


The progression of the pandemic was so swift that simultaneously while some nascent trends were being turbo-charged, the brakes were being forcibly applied on many long-standing practices.


The retail sector found itself at the epicenter of these changes having to manage the complex and different requirements that came with lockdowns, the temporary shuttering of non-essential services and the groundswell of demand for online retail.


Just as we have seen differing performance between commercial real estate sectors, so too have we seen differing performances within the retail sector.


Here we focus on the upper echelons of retail – the (super) prime retail streets in cities across the region – though include discussion on other relevant aspects within the sector.





Key Findings:


  1. Two-thirds of main streets in Asia Pacific saw rental decline in 2020:

  • Key international tourism destinations saw an above average decline of 16%, while other markets declined by 8% on average.


  • Causeway Bay in Hong Kong experienced the steepest decline at 43%.


  • The Luohu district in Shenzhen saw the largest rental growth at 5%.


2. There was little change in rental rankings across the region. The top three most expensive cities remain Hong Kong, Tokyo and Sydney.


3. Chinese mainland markets saw considerably less disruption than many other markets in the region during 2020 with average rental decline of around 5%. Furthermore, Chinese luxury retailers benefited from the lack of international travel as Chinese tourists were forced to shop domestically.


4. Asia Pacific has the largest share of global e-commerce at USD2.5 trillion out of a global total of USD3.9 trillion.


5. The pandemic has transformed the luxury goods sector, such that the online share of luxury purchases increased from 12% in 2019 to 23% in 2020.


6. There has also been a shift to localism – supporting local businesses to help them survive through the pandemic. In a global survey of 8,000 consumers, 50% of households responded that they had purchased more from local businesses.


7. Consumers in Asia Pacific were most likely to avoid making international online purchases, showing a preference to spend their money domestically.



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Source: Cushman & Wakefield

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