Hongkong Land, the property arm of the billionaire Keswick family’s Jardine Matheson, has unveiled plans for a $1 billion revamp of its flagship luxury retail portfolio in Hong Kong’s financial district. This project will involve the development of 10 multi-storey storefronts at its luxury Landmark shopping mall in Central over the next three years. The landlord is investing over $400 million in the upgrade, the largest investment in its Central commercial portfolio in the past decade. Additionally, 10 of Hongkong Land’s tenants, including big names like Hermes, Louis Vuitton, and Sotheby’s, will be contributing an additional $600 million to the project.
The renovation is expected to double the retail space of the 10 tenants to 21,000 square meters, allowing them to showcase a wider range of products and offer more services to customers. Hongkong Land will be self-funding the revamp with income generated from its other commercial properties in the city and property investments in Singapore. CEO Michael Smith expressed confidence in the investment, stating that it will strengthen the Central portfolio and solidify Hong Kong as a top global destination for luxury retail, lifestyle, and offices.
This investment by Hongkong Land comes at a time when Hong Kong is working to regain its status as a global shopping hotspot, following a 14.7% year-on-year drop in retail sales in April. Despite nearly 3.4 million visitor arrivals in the same month, equivalent to 64% of pre-pandemic levels, the city still faces challenges in the retail sector. However, Hongkong Land noted that 80% of its customers are local residents, with the top 70 shoppers at its luxury mall spending a total of HK$1 billion last year. Smith remains optimistic that the upgrade will boost tenant sales and retail income, despite a temporary reduction in rental income during the renovation period.
Hongkong Land is one of the largest landlords in Hong Kong’s Central business district, owning over 850,000 square meters of prime office and luxury retail properties in Hong Kong and other parts of Asia. Under the leadership of CEO Michael Smith, who took on the role in April, the company is looking to enhance its presence in the luxury retail sector. Smith brings experience from his time at Mapletree Investments, a real estate company owned by Singapore state investor Temasek. The company’s commitment to this major renovation project demonstrates its dedication to maintaining its status as a key player in Hong Kong’s luxury retail market.
In conclusion, Hongkong Land’s $1 billion revamp of its luxury retail portfolio in Central Hong Kong signals a significant investment in the city’s retail sector. With a focus on enhancing the retail offerings at its Landmark shopping mall and attracting top luxury brands, the company aims to solidify Hong Kong’s position as a top global destination for luxury shopping. Despite challenges in the retail sector, Hongkong Land remains optimistic about the long-term success of this project and its ability to drive stronger tenant sales and retail income. This investment reflects the company’s commitment to maintaining its presence as a major player in Hong Kong’s luxury retail market and continuing to attract local and international shoppers to its properties.
