Hong Kong's retail hierarchy

A trade mix analysis

5 September 2013


Trade and tenant mix has enormous implications for the success of any retail mall and correctly identifying the most suitable combination is as much an art as it is a science. Perhaps the first thing to note is that the mix is not static but evolves over time in response to changing context (more detail later). Mistakes made in defining the mix can be costly while success sees complementary tenants feeding off each other, meeting shopper needs and optimising revenues.

A wide range of forces define trade and tenant mix including catchment demographics, transport infrastructure as well as the competitive landscape and all these need to be understood not just in today’s market but in the future market also. What changes are expected? New roads or rail lines, new residential or commercial developments in the surrounding area, ageing populations, rising household incomes or shifts in gender profiles? All should be considered.

Before a mall opens, it is usually the job of a retail consultant to quantify these diverse factors and recommend an initial mix (perhaps along with advice on design, layout and phasing). Adjustment to the mix then occurs over time as recommendations are tested by the reality of the market place and sales volumes give a clearer guide as to what is working and what is not.

In this research study we have looked at the trade mix of 40 existing (rather than planned) Hong Kong malls totalling 21 million sq ft from different parts of the retail hierarchy – neighbourhood, district, regional and super-regional. We surveyed almost 6,000 tenants representing 20 different trades over a three-month period. The results yield ‘typical’ trade mixes for each type of mall and give an insight into how our local market is structured.

Looking at the scale of the different types of centre, there was little divergence from what might be expected. Neighbourhood centres were the smallest by area and number of shops, while district-level centres were slightly larger. Surprisingly though, typical regional centres were actually bigger than typical super-regional centres and offered a greater number of retailers. Clearly, super-regional centres rely more on location, design, branding and management than purely their size to attract customers.

In terms of ownership, Sun Hung Kai dominated our basket accounting for 24% of the total floor area, followed by Wharf with 15%, Sino with 11%, the MTRC with 9% and Kerry with 6%.

Trade mixes across centres
Comparing the four types of centre, some obvious trends emerge. F&B dominates neighbourhood centres and represents a less significant proportion of floor area in super-regional centres. A similar pattern emerges for supermarkets and foodstuffs despite a slightly higher representation in super-regional centres due to upmarket offerings such a delicatessens and specialty food outlets. Department stores are important anchors at a super-regional level while apparel also dominates. Household and electronics retailers have a strong foothold at a district and regional level while services favour neighbourhood centres.



Key contacts

Simon Smith

Simon Smith

Senior Director
Research & Consultancy

Two Exchange Square

+852 2842 4573


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