Karim Azar strolls through ifc, the latest in a string of world-class shopping malls in Hong Kong. PHOTO: ARP-Andrew Ross

"Quite frankly, Hong Kong is a name that sells itself. As I go around the world meeting with the top international brands - Louis Vuitton in Paris, H&M of Sweden, Kate Spade of New York, Roots in Canada -  I hear the same thing: everyone is looking at Hong Kong to grow  and expand their businesses. These influential people know that Hong Kong is the fastest-growing luxury capital of Asia - and they are increasingly using Hong Kong to develop brand recognition for the region.

Hong Kong is not only a dynamic market in its own right, but also the entry point to the vastly important Chinese mainland. It's the reason why so many luxury brands are vying for positions in Hong Kong,

Tax-free shopping

China has emerged as the dominant market in a region (Asia) that accounts for 40 per cent of the world market for luxury brand sales. Mainland tourists - increasingly affluent and brand conscious - are flocking to Hong Kong to shop, spending HK$38.6 billion (US$5 billion) on goods and services in 2004 alone. Our tax-free environment is very attractive to them, because luxury goods are 35 per cent cheaper in Hong Kong than in the mainland. Some of our high-end tenants, who have systems in place to determine who is buying what, tell us that mainland shoppers now account for over a third of their sales, and growing. Hong Kong is an ideal testing ground for them, because they can launch new products here that will still reach mainland shoppers, before taking the risk of opening stores in China.

Hong Kong itself is one of the great shopping destinations of the world. It has an abundance of prestige hotels, no traffic problems, an excellent airport and is extremely well connected. The brand concentration in Central is such that you can find everything you need in one district, whereas elsewhere you'd have to travel an entire city. This is very beneficial for the big retail brands and is why so many have significant presence there.

Having positioned itself at the forefront of high quality shopping environments, Hong Kong is now a role model for Asia. We have people from Japan and Europe coming to see what Hong Kong is doing, and to get ideas for their own countries. All the big shopping centre owners in the world now look to Hong Kong as an example.

Who's who of style

Hong Kong is continually upgrading its retail image through massive investment in A-Grade infrastructure. It boasts a host of impressive shopping malls, the latest being the International Finance Centre mall (ifc). Built at a cost of over HK$30 billion (US$3.9 billion), ifc incorporates the tallest building in Hong Kong, housing over 200 international brands, a world-class cinema and is home to Hong Kong's first Four Seasons-branded hotel and apartments.

Our tenant mix reads like a who's who of style, with names like Zara, Ferragamo, Tiffany, Chopard, Prada, Mikimoto, Valentino, Kate Spade and Hugo Boss, along with the HK$200 million (US$26 million), 85,000 square foot new concept Lane Crawford department store, which has been used by Sachs and Bloomingdales as an example of where the department store business is going.

Every major international brand that isn't in Hong Kong already wants to be here - even though rents are going up. Sun Hung Kai is inundated non-stop with brands desperately looking at this market, and there are many local partners willing to invest with brands on a five-year plan. So yes, I genuinely believe Hong Kong's retail situation has a bright future for all parties involved."

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