August 24th, 2012
02:31 AM GMT
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Hong Kong (CNN) – The glitz and prestige of New York’s 5th Avenue makes it one of the most famous streets on the planet. But a torrent of mainland China visitors and a rental war among global brands will soon push the property prices in Hong Kong’s Central district higher than New York’s most expensive address.

As CNN’s Ramy Inocencio reports, Colliers predicts that by 2014, the average retail space in Hong Kong’s Central district (pictured above, left) will eclipse the $2,600 square foot price of New York’s 5th Avenue (pictured above, right). Presently, the average price is about $1,800 per square foot in Central, but prices have been zooming higher as retail brands jostle for prime real estate in this tightly packed territory.

We residents in Hong Kong have become accustomed to the blink-and-it’s-gone lifespan of businesses getting edged out of retail spaces by sky-high rents. A friend of mine who is a restaurateur in Central’s Soho district has seen his rent double in the past three years. Coach just re-signed its lease on its flagship store here in Hong Kong for triple its original rent – now paying nearly $1 million a month.  Spanish clothier Zara is taking over the property now rented by Swedish competitor H&M by offering double the amount of rent to $1.5 million a month.

As Ramy reports, the prize in this rental arms race is mainland Chinese customers who stream into Hong Kong.

At this rate, Hong Kong will soon have the priciest real estate on the planet. But is it worth it? Will the rental rates continue skyward, or is a crash coming?

Have your say. Comment below.

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Filed under: ChinaHong Kong


soundoff (40 Responses)
  1. /lol

    So this article is about a place that MIGHT be the priciest instead of the actual priciest as described by this very misleading article headline???

    August 24, 2012 at 3:12 am |
  2. TheRationale

    I was hoping for a list of expensive streets with cool pictures or something.

    Anyway, I hope that's a bad picture of Hong Kong's street because it doesn't look very nice.

    August 24, 2012 at 8:48 am |
  3. wasso

    Boardwalk in my Monopoly set.

    August 24, 2012 at 10:30 am |
  4. Doug

    You need to sell alot of product to pay that rent, if that doesn't happen then this will change quickly... I think they are stupid to pay that kind of rent, but, they need to do this to figure it out I suppose..

    August 24, 2012 at 10:36 am |
  5. samhoser

    I was hoping for a list and pics too. Te pictue from Hon Kog is 2 differen street. Left side is a crappy sde street "Wellington Street", righ side is the new Abrcrombie store on Pedder. Wellington does have some good cheap local food though, so if you're ever in town check it out.

    August 24, 2012 at 11:02 am |
  6. bluebird

    they pay $12,000,000 a year for rent they can build their own building for that....what a waste of money....better money should be put into research for a better life on earth and not some stupid piece of clothing for the rich....

    August 24, 2012 at 12:03 pm |
  7. EVN

    The tenants are dumb for spending that kind of money on rent, and the store patrons are dumber for paying the resulting inflated prices for whatever is being sold. It is not sustainable.

    August 24, 2012 at 1:41 pm |
  8. tet1953

    Of course it will crash. No idea when, but it will happen. Plenty of examples of this sort of thing all over the world. It's a bubble.

    August 24, 2012 at 1:57 pm |
  9. oneforall77

    All is vanity!

    August 24, 2012 at 2:02 pm |
  10. wirebird

    in the Hong Kong photo... what is a "part massage center"?
    no wonder it is more expensive than 5th avenue. one street sets the standard for civility and class... and the other massages various parts.

    August 24, 2012 at 2:03 pm |
  11. upstateny

    Not sure what's going on. I'm not sure if it's another instance of greed taking over OR they are trying to eliminate or greatly reduce the "Hong Kong District from 5th Avenue. Either way; just like every game that is played, there are winners and losers.

    August 24, 2012 at 2:06 pm |
  12. Owais

    if i explain in simple layman words. demand is high and supply is less so rents are going high there comes a point where companies and people cant afford the rent because fix expense is higher than their income. after this point demand is will reduce and shops will start to be empty no new shops will be open and this business hub will not remain like as it used to be and shops will start to move in some other place. when shops will start to get empty reputation of that area will decrease so rents will be decrease and many people will also get unemployed as this is biggest problem right now facing in any place of the world. before the place is ruined there government should take action to protect its commerce industry as it is part of creating revenue.

    August 24, 2012 at 2:15 pm |
  13. Sarah

    I cannot see why being the most expensive place is something to celebrate, rather than something to be embarrassed about. This looks like shallow consumerism taken to fetishists levels.

    August 24, 2012 at 2:25 pm |
  14. mc

    Look, I have never been to China and I have never studied the Chinese, but I live right next to New York Cities Chinatown and if these people are a slice of China, they have no chance of taking over the world at all. They are not a threat to America. They are the strangest people in the world. They have a huge population, but a very small educated population.

    August 24, 2012 at 2:27 pm |
  15. bill

    LKF or Wan Chai?

    August 24, 2012 at 2:36 pm |
  16. zeon777

    I know places like Coach, Zara, and H&M can make a lot of money in sales, but $1M in pure profit each month going straight down the drain for rent? That seems unsustainable.

    August 24, 2012 at 2:48 pm |
  17. tom

    INSANE....that's what it is.

    August 24, 2012 at 3:12 pm |
  18. AbuIbrahim

    The average price per square foot in Monaco is five times greater than the streets mentioned in this article. The author needs to get his facts straight.

    August 24, 2012 at 3:26 pm |
  19. scott

    With ObamaTard understanding less about incentive than my 3 year old daughter, the prices in HK will never stop climbing – nor the prices in the US ever stop falling. HK has a 2% business tax. Every business in the world will migrate there. Thanks to ObamaTard, the equilibrium of Americans making less, and foreigners making more, is accelerated even more. Incentive is what makes the world go 'round. If you give someone a reason to create a business, or get a job – they will. If you give them incentive not to – they won't. Hopefully Obama reads this and takes some notes.

    August 24, 2012 at 3:43 pm |
  20. bill covington

    I can't see how it is unsustainable. 5th Ave. has been that way for decades. Only when demand drops will the price drop. Hong Kong is beautiful and for those who think them strange... that is unsustainable. 5th Ave is beautiful as well !

    August 24, 2012 at 3:50 pm |
  21. oy

    Hong Kong is Oligopoly. Government is corrupt and its getting harder for the individual to make money. Basically Hong Kong Gov went to bed with Big Money. Seems to be contagious because its happening in the US. I think our Gov is having China envy.

    August 24, 2012 at 4:11 pm |
  22. Markai

    I am an expat and live in HK for 25 years.
    Prices were always high, but not like that. The problem is all the Mainland Chinese coming over for shopping with their more valuable RMB, compared to the HK$. It used to be the opposite.
    Also the increased opening politics of China lets more people pouring into HK.
    HK economy obviously welcomes the visitors, especially since visitors from other international visitors are falling.
    Still, shops, mostly the well known brands, are making a profit, but sure many smaller one's are closing, or moving.
    We are watching here capitalism at its best.
    Landlords in HK are very well known for their greed and demanding outraegous commercial and residential rent increases, but China's economy is slowing down at the moment.
    I believe there is a bubble and in the future we will see a drop. A lot depends on China's economy.

    August 24, 2012 at 4:11 pm |
  23. someguy

    Habibi (sign in the picture) has some amazing Egyptian food.

    Oh, and HK business tax is not 2%.

    August 24, 2012 at 4:44 pm |
  24. scott

    Sorry 16.5% corporate VS 35% corporate in the US.

    August 24, 2012 at 4:54 pm |
  25. scott

    oh and unincorporated is lower – and there is 0% capital gains. where will your next online business be?

    August 24, 2012 at 5:01 pm |
  26. Carvalhoski

    Africa is next, the crash is next, the EU is next, the US is next, too much money out there, we need more cash, too many credit cards, we need people to buy more.
    Why don't you just give me your cash and keep trying to guess what is going to happen next, I will invest it for you, I will keep a small % every month, and will also charge you some fees, this is cost of business, if you don't know what this is, you do not have a business, than you will need to start one to know it, and if you don't have a job, than start a business and than hire someone to work for you, so now you have a job and that other guy too.
    Further more if you are going to tel me "learn to write in English" I am spending too much time messing up 4 other languages, so I suggest that you donate your time to a literacy program, so we all can learn from a superior being like yourself.
    In conclusion if you think this is a lot of crap why you are here and not in Hong Kong.

    August 24, 2012 at 8:39 pm |
  27. shopbuyamerican

    Until Americans WAKE-UP the Chinese will keep getting richer, while Middle-Class America withers and ultimately disappears. Every American citizen has it within their power to help turn the US Economy around by making an earnest effort to buy American Made products and conduct business with only companies that are based in the USA and do NOT outsource jobs. Help keep jobs in the USA... go to: ShopBuyAmerican.us

    August 25, 2012 at 2:24 am |
  28. Don

    Anything can happen without your least expectation. See what happened to the US sub-prime. Until it collapses, the managers openly admitted that they are just following blindly in believing it's part of the "investment game". What a pity when human greed clouded our culture and wisdom.

    August 25, 2012 at 3:50 am |
  29. Chocolate cupcakes

    Yuck, imagine paying 5th avenue prices for Chinese made Ralph Lauren junk.

    August 25, 2012 at 10:13 pm |
  30. kumaran

    They pay for branding, advertisement and marketing. Instead of paying 1000's for few seconds having their shop in reputed place is just for advertising. These shops are for certain market segments only and to build a hype they have to have a shop. You think spending money for macy's parade or even having a shop in Manhattan is justifiable? maybe Macy own that place that is different.

    August 26, 2012 at 2:11 am |
  31. Steve

    All bubbles eventually pop. Those driven by trends are the most spectacular when they do.

    August 26, 2012 at 5:19 am |
  32. Kennedy Bashorun

    I think it has always being like this for a place to start boomimg and later slow down. Ultimately, the investor will realize if its profitable to contnue paying that high price on just rent.

    August 26, 2012 at 6:29 am |
  33. Tim Hurley

    Who gives a shizz? Another CNN bogus "article.

    August 26, 2012 at 12:02 pm |
  34. Rosanna Wong

    What goes up must come down, the price in Hong Kong may go up but will not remain high. Though she may lose her top spot once in a while, NY will always be expensive.

    August 27, 2012 at 9:54 am |
  35. A Local Hongkei

    This is a ridculous place as the local govt just wanna please the mainlanders particularly those "in official capacities" to rip off the general population, who usually will send their money down to HK to buy properties. this is getting out of hand. the govt will not curb the issues as it will upset the poltical power all the way up.

    August 28, 2012 at 1:54 pm |
  36. lerxt

    In order to pay rent of $2,600 per square foot a store needs to generate roughly $26,000 in revenues which may seem crazy, but a lot of the shops in High Street locations are high-end luxury retailers that can easily do this (such as Cartier, Tiffany, Louis Vouitton, Gucci, etc.). I have been told that the Apple Store in a major shopping mall does more in sales than the combined sales of the two department stores in that same mall. The Apple Store is a fraction of the size but generates more sales than to very large stores. It's not that crazy!

    August 28, 2012 at 3:36 pm |
  37. Sarah

    I think that $2,600 per square foot is too much in New York.

    August 29, 2012 at 4:54 pm |
  38. Alex

    Try Tverskaya St. in Moscow ;-)

    August 31, 2012 at 5:08 pm |
  39. Regina Tse

    I'm from Hong Kong.

    The rapid rise of rent mention above actually brings the household rent up too – also rapidly. Lliving in HK is very very difficult now. People are paying at least 50-70% of their monthly salary just for living in a 100sq.ft. room as their flat again, like in the 70\'s of HK. We are going backward and we HK people are very angry.

    September 4, 2012 at 3:29 am |
  40. soho

    Hello, i believe that i saw you visited my weblog so i got here to return the prefer?.I am trying to find issues to improve my site!I guess its ok to use a few of your ideas!!

    November 20, 2012 at 10:45 pm |

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