(Bloomberg) -- Prada SpA is renting a 8,000-square-foot store in K11 Musea, a harborfront luxury shopping mall by New World Development Co., people familiar with the matter said.
Construction work for the two-floor store will begin soon and it’s expected to open early next year, said the people, who asked not to be identified discussing private matters. Rent is likely to be partly based on store sales, some of the people said.
This will be Prada’s first major new store in Hong Kong in years. The group shut its flagship in Causeway Bay in 2020, ending one of the city’s most expensive retail leases with a monthly rent of HK$9 million ($1.2 million). The brand, which at its peak had nine outlets in the city, now operates six, according to its website.
Prada’s communications team in Italy didn’t respond to emailed requests for comment outside of regular business hours. New World, controlled by the family of billionaire Henry Cheng, declined to comment.
New World’s stock rose as much as 1.7% during early Monday morning trading in Hong Kong, the most in more than a week. Prada climbed as much as 1.9%.
Global luxury brands are increasingly returning to Hong Kong’s core business districts, attracted by property prices that are much lower than pre-pandemic levels. In Tsim Sha Tsui, where Musea is located, average rent for stores at major shopping streets is still 45% below the 2019 level, according to studies by Cushman & Wakefield Plc.
The city’s high-end shopping malls have accelerated a luxury push to add appeal to the moneyed classes, whose spending remains strong despite years of social unrest and a slowing economy. New World, led by Chief Executive Officer Adrian Cheng, teamed up with Louis Vuitton to host the brand’s first ever fashion show in Hong Kong last year, with the event staged just outside Musea.
Hong Kong’s wealthy residents have provided some stability for global brands against a sales slump in their key market of mainland China. The shopping hub also remains one of the most popular destinations for mainland tourists.
Hongkong Land Holdings Ltd. and tenants including Hermes International SCA and Louis Vuitton will invest $1 billion to upgrade the developer’s flagship retail space Landmark in Central. Hysan Development Co. is also revamping its Lee Gardens, a group of luxury malls in Causeway Bay, with tenants including Hermes and Chanel expanding their stores.
(Updated the fifth paragraph with stock moves)
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