Hong Kong’s retail property market is gradually building momentum as spending and confidence of consumers and tourists return, according to analysts.

Unlike the city’s past peak rental levels, however, this time the tenant mix was more diversified, with retailers offering unique experiences and products that enhanced their appeal to shoppers, they said.

“We see structural shifts towards more experience-driven and diversified tenant mixes, rather than a full return to past peak rental levels,” said Kathy Lee, head of research and retail consultancy at Colliers. “While rents are forecast to grow modestly, a broad-based rebound to pre-Covid-19 levels is unlikely in the near term.”

In the first three months of the year, the city’s retail sales rose 12 per cent from a year earlier to about HK$106.3 billion (US$13.6 billion), according to the latest official data.

High street rents, on the other hand, were largely stable, with overall rental growth of 1.6 per cent year on year as leasing demand remained concentrated on well-located, mid-sized units, according to Colliers, which estimated as much as a 5 per cent rise in rents for shops over the year.

“The market has moved past its trough, with retail sales recording sustained growth and high-street rents stabilising,” Lee said. “However, recovery remains selective and closely tied to tourism and consumption patterns.”