International retailers are bypassing Hong Kong to open stores on the mainland instead, because of the limited supply and higher cost of prime retail space in the city.
'Many international brands prefer to lease an entire block [a three to four-storey building] for their stores as they do in Europe,' said Maureen Fung Sau-yim, the general manager for leasing at Sun Hung Kai Real Estate Agency. 'But it is difficult to find such opportunities in Hong Kong.
'On the other hand, there are many heritage or old buildings in Shanghai that are suited to the demands of the international brands because the space they offer fits their business model.'
Lower rentals and higher shopping traffic provided an added lure to retailers to leapfrog Hong Kong and enter the mainland market directly, the developer of a Beijing arcade said.
South China Morning Post