Hong Kong's frenetic Causeway Bay shopping district is at risk of losing its crown as the world's most expensive retail space as a slowdown in mainland tourists hits store sales, paving the way for the first drop in retail rents in a decade.
Hong Kong shop store rents stood at around HK$4,331 ($560) per square foot in the first quarter - about 25 percent higher than those in New York and almost triple similar rents in Paris, the world's second and third most expensive cities for retailers respectively, according to property services firm CBRE.
But China's economic slowdown and a high-profile anti-corruption drive has taken a lot of the fun out of the kind of conspicuous consumption mainland tourists come to Hong Kong to enjoy.
That means luxury retailers in glittering Causeway Bay are finding it a little tougher to sell big-ticket items like jewelry, reducing their ability to afford the area's high rents and threatening to knock Hong Kong off its perch as the most sought-after retail space in the world.
"China was the only girl in the dance. Now as China's growth has started to moderate ... brands are seeing there are other markets around," said Sebastian Skiff, executive director of Asia retail services at property consultancy CBRE.
"I probably do see New York regaining the No.1 spot in the not too distant future - within 2014 or into 2015."