Core Insights - The vacancy rate of retail shops in Hong Kong's four core areas (Central, Tsim Sha Tsui, Mong Kok, and Causeway Bay) recorded approximately 11.9% in Q3 2025, a slight decrease of 0.2 percentage points from Q1, marking the first decline since Q1 2024 [1] - The number of vacant shops totaled 881, a reduction of 16 shops or 2% compared to Q1 [1] - The decline in vacancy rates is primarily driven by a significant recovery in the tourism sector, leading to increased leasing and sales activities in core areas [1] Tourism Impact - The number of visitors to Hong Kong has been steadily increasing, with a total of 36.47 million visitors in the first three quarters of the year, including 27.99 million from mainland China, representing year-on-year increases of approximately 12% and 11% respectively [1] - The sector benefiting the most in terms of percentage growth in Q3 is the souvenir and gift retail industry, which saw an increase of 13 shops to a total of 45, reflecting a growth rate of 40.6% [1] Market Outlook - The retail market in Hong Kong is currently in a "consolidation phase," with expectations that shop prices will continue to adjust, and banks and investors will maintain a cautious stance [1] - Shop transaction volumes are expected to remain stable with slight fluctuations at low levels, although core area shop prices and rents have significantly decreased from peak levels, attracting both investors and users [1] - The vacancy rate in core areas has shown signs of decline, and rental transactions have also increased [1] Future Projections - There is a belief that with the strengthening of the tourism sector and a robust stock market, the economic situation in Hong Kong has improved significantly, suggesting that the vacancy rate may have peaked and could continue to decline at a slow pace in the future [2]