Market sentiment weakened in Q4 2018 under the impact of U.S.-China trade conflict and stock market volatility. Retail sales rose by 6% y-o-y in October but growth decelerated to 1.4% y-o-y in November, the slowest monthly increase since June 2017.
Visitor arrivals remained solid, recording 15.9% growth y-o-y in October and November combined, the strongest quarterly y-o-y growth in 2018. This ensured continued strong leasing demand from health, personal care and cosmetics retailers.
Vacancy in tier I streets in the four core retail districts edged up by 0.2 percentage points from 3.6% in Q3 2018 to 3.8% in Q4 2018. However, the full-year vacancy rate fell by 0.3 percentage points to 3.8% compared to 4.1% a year ago.
Overall high street shop rents for the four core retail areas slightly dipped by 0.4% q-o-q in Q4 2018. However, full-year rents managed to record 0.2% growth, bringing four years of annual declines to an end.