Hong Kong and Singapore Retail Markets Rebound, but Singapore May Prevail Long-Term

Residents in Hong Kong and Singapore are shopping and dining across borders to take advantage of cheaper prices Hongkongers in Shenzhen and Singaporeans in Johor Bahru. This trend, called retail leakage, is expected to continue, impacting both cities’ retail sectors.

Hong Kong vs. Singapore Retail Rents: Retail rents rose faster in Hong Kong than in Singapore in the first quarter of 2024. Hong Kong’s high street shop rents increased by 1.7%, and prime shopping centers saw a 0.7% rise. In contrast, Singapore’s prime area rents inched up by 0.6%.

Tourism and Spending Patterns: Hong Kong’s tourism hasn’t fully recovered, with a government forecast targeting 46 million visitors in 2024, only 70% of the record 65 million in 2018. Estimated spending per overnight visitor is expected to drop by 16.4% to HK$5,800 (US$743). In 2023, Hongkongers made over 35 million digital transactions worth about 8.6 billion yuan (US$1.2 billion) in Shenzhen, a 70% increase from 2022. This trend extends to Guangzhou, Zhuhai, and Zhongshan, where goods and services are much cheaper than in Hong Kong.

Singapore’s Advantage: Singapore, on the other hand, benefits from rising tourism and the affluence of Southeast Asian countries. Singaporeans have been driving to Johor Bahru for cheaper petrol and shopping since the 1980s. The strength of the Singaporean dollar against the Malaysian ringgit makes shopping in Johor Bahru very attractive, with prices about 30% lower than in Singapore. This trend is likely to continue with new malls and a rail link between Woodland in Singapore and Bukit Chagar in Johor Bahru opening in 2026.

East Coast District 15 and Meyer Blue Condo: One notable area in Singapore that is attracting interest is District 15, particularly the East Coast. This region is known for its luxurious residential properties and vibrant lifestyle. The upcoming freehold Meyer Blue Condominium is a significant development in this area. Set to redefine luxury living, Meyer Blue offers breathtaking sea and city views, and its prime location ensures easy access to amenities and the Central Business District (CBD). This development is poised to be a prime choice for both homebuyers and investors looking for upscale residences in a highly sought-after area.

Future Outlook: Analysts believe that Singapore’s retail sector will remain strong, supported by increasing tourism that isn’t solely dependent on China. High-profile events like concerts are drawing regional tourists to Singapore, further boosting retail sales. Singapore’s visitor numbers in 2024 are expected to approach the 19 million seen in 2019, bolstering the retail market.

In conclusion, while Hong Kong faces challenges from cross-border shopping, Singapore’s diversified tourism and strong currency position it for long-term retail growth. With developments like Meyer Blue in District 15, the city-state continues to offer attractive opportunities for both retail and residential investments.