Hermès is gearing up to move its Hong Kong flagship from The Galleria at 9 Queen’s Road Central to a nearby luxury mall.
“We have just signed a contract with Hong Kong Land for the relocation of the brand to Prince’s Building. It is a significant investment and proves the brands confidence in the local retail market,” said a brand spokeswoman.
On Wednesday the Chinese-language Hong Kong Economic Times newspaper reported that Hermes has put its flagship Central store on the market for 1.5 billion Hong Kong dollars, or $192.56 million at current exchange. Chan declined to comment on the sale of the property or whether they had a buyer interested.
The company bought the 7,500-square-foot space at 9 Queen’s Road Central in 2002 for a reported 190 million Hong Kong dollars, or $24.39 million. If is realizes its asking price, it will mean an almost seven-fold increase or 1.3 billion Hong Kong dollar ($166.89 million) profit.
Hong Kong’s retail market has come under pressure in recent months as mainland Chinese tourists opt to shop elsewhere. December retail sales slid 8.5 percent. Due to sluggish leasing demand, overall retail rents are expected to show a “minor correction,” and drop less than 1 percent in 2016 across Asia, according to recent research from property firm CBRE. CBRE said the Hong Kong rental market will continue to struggle this year.