Centaline: Neighborhood retail spaces see uptick as rents stabilize

The neighborhood retail rental market is showing early signs of recovery, with a noticeable rise in leasing inquiries and gradual improvement in market sentiment, according to property agency Centaline Macau.

“Although transaction volume remains comparable to last year, rental inquiries have clearly increased,” said Jack Chong, director of Greater Bay Area and Hong Kong-Macau Investment Promotion at Centaline.

“With long-standing high vacancy rates in neighborhood districts, tenants now have more options, and rents have largely adjusted to a more realistic level.”

In a statement released by the realty, Chong noted that the rent adjustments have encouraged a range of small- and medium-sized businesses to enter or expand in residential areas.

In the northern district, for example, more livelihood-related trades such as beauty salons and barbershops have moved in, while education centers are opening new branches near schools.

Av. de Horta e Costa – traditionally a hub for local spending – has also picked up in business following rent declines.

“Many SMEs are reconsidering their strategies, including relocating or upgrading their shops to improve efficiency,” the realtor said.

One example cited was a 2,000-square-foot unit in Fai Chi Kei recently leased to a food and beverage operator for around MOP55,000 per month, approximately 10% lower than the previous rent.

Chong added that the government’s “Support Plan for First Stores in Macau” is helping to further invigorate the market by lowering entry costs for new brands.

Also known as the “First Store Economy Scheme,” the government initiative offers subsidies of up to MOP1 million for qualifying businesses from mainland China, Hong Kong, Taiwan, and overseas in a bid to attract non-local brands to open their first physical stores in the city.

“With rent adjustments and policy support in place, tenant interest in neighborhood districts has risen,” Chong said. He expects leasing transactions to increase in the fourth quarter, gradually easing vacancy levels, though he noted that “overall rents may still have room for about a 10% downward adjustment.”