The value of retail sales in the first quarter contracted 1.2% year-on-year, but the figure lifted 3.6% compared to the previous quarter of last year. For March, the retail sales only decreased slightly by 0.2% year-on-year, while the figure improved dramatically from -10.2% for February. Visitors to Hong Kong in the first quarter advanced by 16.8% year-on-year, with Mainland visitors grew by nearly 20%. During the five-day “Golden-Week” break, about 1 million Chinese visitors arrived the town, up 40% year-on-year. It is expected to continue to attract tourists to visit Hong Kong amid the launch of Guangzhou-Shenzhen-Hong Kong high-speed rail and Hong Kong-Zhuhai-Macao Bridge. Although the US-China trade talks remain bearish and weigh on retail sentiment, the wealth effect stemming from Hong Kong property price rally since February and favorable first quarter retail growth from malls located in the main shopping areas could provide support for retail market and rental revenue in the second quarter. On the other hand, office supply in core commercial districts remains under pressure means providing office rental support. Rental properties providing stable income could guard against market downturn amid the low interest rate environment and US-China trade dispute uncertainties.

Bloomberg, Census and Statistics Department, Hong Kong Tourism Board

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