Hong Kong Real Estate Growing divergence among mall operators

Research evidence excerpt

Hong Kong Real Estate Growing divergence among mall operators

2 July 2026

Hong Kong Real Estate EquitiesREMD

Growing divergence among mall operators Hong Kong

◆ May retail sales beat expectations; however, we expect Raymond Liu*, CFA

growth to moderate in 2H due to base effects Analyst, Asia Real Estate and Conglomerates The Hongkong and Shanghai Banking Corporation Limited

raymond.w.m.liu@hsbc.com.hk

◆ We expect high-end retail malls to continue to perform well, +852 2996 6743

while community malls are likely to remain under pressure Michelle Kwok*

Head of Asia Real Estate and HK Equity Research

The Hongkong and Shanghai Banking Corporation Limited

◆ Among landlords, we like Hysan (14 HK), Swire Properties michellekwok@hsbc.com.hk

(1972 HK), and Link REIT (823 HK); all rated Buy +852 2996 6918

Ganesh Siva*

Associate

Better-than-expected May retail sales. Hong Kong retail sales rose 7.9% y/y in Bangalore

May (vs 8.7% in April), beating consensus of 6.7%. This marks the thirteenth

consecutive month of growth, reinforcing the view that the retail recovery is intact as * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations

the macro GDP outlook of the city improves. Luxury-led categories remain the key

driver: Jewellery, Watches, Clocks & Valuable Gifts surged 25.8% y/y, supported by

firmer tourist and local spending. Visitor arrivals reached c.23m in May (+14% y/y).

Looking ahead, we expect retail sales growth to remain positive but to moderate

in 2H, given a higher base and continued e-commerce penetration.

Mall operators: performance divergence is widening. Hong Kong retail is becoming

increasingly polarised, similar to the office market, as online shopping reshapes retailer