Hongkong Land plans $1 bln luxury retail destinations in financial hub (updated)
26/06/2024 12:39
(Adds company comments throughout)
By Clare Jim
HONG KONG, June 26 (Reuters) - Hongkong Land HKLD.SI
announced a more than $1 billion, three-year investment in
ultra-luxury retail in the heart of the city's financial
district on Wednesday.
The commercial property developer, which is 53.3% owned by
Jardine Matheson JARD.SI , said it planned to invest $400
million, with $600 million coming from tenants, on 10
two-to-eight-storey Maison destinations within existing
developments.
Located in Hong Kong's Central business district, strategic
tenants of the developments include luxury names such as
Sotheby's auction house, Cartier, Tiffany & Co and Louis
Vuitton, whom Hongkong Land said had a "very strong intention"
to expand their content and customer experience.
The expansion plan comes against a backdrop of overall
sliding retail and office markets in Hong Kong, where vacancy
rates are at record high levels.
But Hongkong Land said its 'Very Important Customer' (VIC)
group has continued to spend more in 2023 and 2024, an average
of HK$1 million ($128,080) each last year. VIC contributed
around 80% of the company's luxury retail sales in Hong Kong.
"We clearly believe in the ability in the luxury retail
market in Hong Kong," said Alexander Li, Hong Kong & Macau chief
retail officer of the company.
"One of the biggest advantages of Hong Kong is it is a
global wealth centre ... We'll continue to be a place that
attracts lots of sophisticated lifestyle clients, and
particularly the VIC population," Li added.
The developer, one of the major landlords in Central, will
convert one-third of the low office floors for the ten Maison
destinations, expecting the investment would bring stronger
retail income after the transformation is completed in 2028.
Hongkong Land announced last year it planned to open 10
retail developments in the next five years in seven cities
across China.
($1 = 7.8076 Hong Kong dollars)
(Reporting by Clare Jim; Editing by Anne Marie Roantree, Jason
Neely and Alexander Smith)
((clare.jim@thomsonreuters.com;))