With Prada out, can Hong Kong's Russell Street outshine Fifth Avenue or Champs-Elysees as the world's costliest retail strip?

By Sandy Li and Lam Ka-sing sandy.li@scmp.com / https://www.scmp.com/business/article/3026464/prada-out-can-hong-kongs-russell-street-outshine-fifth-avenue-or-champs?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 12, 2019 2:02 AM SGT
Landlords in Hong Kong's Russell Street, the most expensive shopping address on the planet, are likely to slash rents after fashion house Prada declared it would not renew the lease on its flagship store next year, according to market observers.
Prada's landlord has offered to cut the rent for its next tenant at Plaza 2000 on Russell Street, by a staggering 44 per cent as luxury vendors come under increasing pressure from a marked slowdown in sales.
Analysts expect other landlords to follow suit, and warn there could even be an exodus of other global retailers from the famous shopping area in Causeway Bay.
They expect retail rents in the street " famous for its luxury goods " to tumble by as much as 30 per cent this year as leases come up for renewal. Customer footfall, already on the slide because of the rise of online shopping, has taken a further hit from the three months of often violent street rallies that have gripped Hong Kong.
Russell Street in Causeway Bay, Hong Kong on 2 January 2017. Photo: Felix Wong alt=Russell Street in Causeway Bay, Hong Kong on 2 January 2017. Photo: Felix Wong
She said spending on luxury goods dropped almost 30 per cent in 2018 from a peak five years earlier as tourists' footfall declined and spending weakened. Landlords of shops catering to top-end retailers may face a similar magnitude of decline in terms of rent, she said.
Prada is leaving Causeway Bay when its seven-year lease at Plaza 2000 expires in June next year. Photo: Martin Chan alt=Prada is leaving Causeway Bay when its seven-year lease at Plaza 2000 expires in June next year. Photo: Martin Chan
Prada will close its 15,000-square foot (1,393 square metre) store, for which it pays HK$9 million (US$1.15 million) in monthly rent, when its seven-year lease expires in June 2020, according to its landlord Early Light...