Hong Kong Property: May Retail Beat; Spot Rent Stabilization Brings ‘27E Reversion Upside

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Hong Kong Property: May Retail Beat; Spot Rent Stabilization Brings ‘27E Reversion Upside

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02 Jul 2026 08:24:44 ET │ 12 pages

Hong Kong Property

May Retail Beat; Spot Rent Stabilization Brings ’27E Reversion Upside

CITI'S TAKE

Griffin Chan AC

HK May retail sales beat — May retail sales value rose 7.9%yoy (Apr: +8.6%; +852-2501-2438

5M26: +11%), at the upper end of our previous 5-8% growth expectation. griffin.chan@citi.com

Growth was driven by (1) continued outperformance in jewelry, watches and

valuable gifts (+26%yoy), supported by an 8% increase in Golden Week Cindy Li AC

arrivals and a weaker HK$ against Rmb; (2) electric goods (+13%yoy); (3) +852-2501-2710

department stores (+9%yoy), with sales value hit a 30-months high, partly cindy.li@citi.com

reflecting anniversary promotions by some operators that capitalized on the

Golden Week tourism; (4) supermarket (+1%yoy) extending the stabilization

trend, with sales value reaching a YTD 2nd high. Online retail sales +32%yoy

and accounted for 10% of total retail sales (mom stable, yoy +2pts).

FY retail sales could hit HK$400bn+ despite possible ST drag from capital market

weakness in Jun — We expect FY26 retail sales could recover to HK$400bn, with

upside potential as the required 1.4%yoy growth for the remainder of the year

appears to be readily achievable. While the recent capital market weakness (Hang

Seng Index -9% in Jun-alone) may weigh on consumption sentiment & discretionary

spending in the near term, we expect retail sales growth will extend into 2H26E. We

estimate HK Jun retail sales rose 3-6%yoy (to HK$31-32bn), supported by sustained

tourism arrivals (we estimate +7%yoy), resilient luxury spending, stabilization in

non-discretionary trades, and local economic expansions.