Hong Kong retail market becomes increasingly polarised
The widening performance gap signals polarised occupier demand, potentially strengthening prime mall leasing while mid-tier and neighbourhood assets face pressure from e-commerce and outbound consumption.
Hong Kong retail sales rose 8.6% year-on-year in April, as luxury sales increased 19.8% while department store sales declined 6.7%.
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Luxury retail outperformed whilst local department store sales saw declines.
Hong Kong's retail recovery continued to gain momentum in 2026, although performance across the sector has become increasingly uneven, according to Knight Frank.
Knight Frank said retail sales rose 8.6% year-on-year in April, marking a 12th consecutive month of growth, while sales for the first four months of the year increased 11.3%.
Luxury retail remained the standout performer, with sales of jewellery, watches, clocks and valuable gifts rising 19.8% year-on-year in April. However, local consumption segments remained weaker, with department store sales declining 6.7% and supermarket sales increasing just 3.0%.
The consultancy also highlighted accelerating growth in online retail, with e-commerce sales rising 30.2% year-on-year in the first four months of 2026 to account for 9.7% of total retail sales. Knight Frank forecasts online retail sales will reach HK$37 billion this year as mainland Chinese e-commerce platforms continue to intensify competition.
According to Knight Frank, the retail property market is becoming increasingly polarised. Prime shopping malls continue to benefit from recovering tourism, stronger spending by mainland Chinese visitors and resilient luxury demand, while mid-tier and neighbourhood malls remain under pressure from growing e-commerce penetration and outbound consumption.