Overall prime high street retail dropped 0.3% in 2Q14

First quarterly decline since end-2008.

Overall prime high street retail rent in the second quarter of 2014 dampened by -0.3 percent from the previous quarter, the first quarterly decline since the end of 2008.

According to a report from CBRE entitled "Hong Kong Prime Retail MarketView 2Q14," this shows a retail market under potential rental correction.

Accordingly, y-o-y rental growth continued to slow, as indicated by the lowest y-o-y growth since 3Q99 of 2.4 percent this quarter.

The report noted that this fall was caused by Causeway Bay's first negative growth of -0.6 percent q-o-q since 2009.

Here's more from CBRE:

Tier-1 streets rents dropped by 1.4% q-o-q, showing landlords' willingness to adjust their rents.

Surprisingly, and despite growing vacancies, tier-2 rents remained steady.

The other districts remained stable with no q-o-q rental change in both tier-1 and tier-2 high streets.

Given the slowing demand for new retail space, caused by the recent retail sales drop, high streets landlords became less demanding for rental increases.

Despite this, landlords remained reluctant to lower their rents, fearing a negative impact on their capital investment.

Noteworthy that, some tier-2 streets landlords recently agreed to lower their asking rents, on short-term leaser only, to cope with the rising vacancy from which their shops are experiencing.