HONG KONG: Hongkong Land announced a more than US$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 per cent owned by Jardine Matheson, said it planned to invest US$400 million, with US$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 (US$128,080) each last year. VIC contributed around 80 per cent 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 the lower floor offices in two of its towers to create one-third of the new space 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.