According to media reports, Sweden clothing Retail giant H&M (microblog) will close its flagship store in Hong Kong's Central Business District due to the increase in rent to HK $1.4 million per month. The tenant will be the Zara brand.

High rent H&M closes its flagship store in Hong Kong

A spokesman for H&M said that the rent of the 2790 square meter store, located in a prime location in Hong Kong, would double. The flagship store was officially opened five years ago.

The spokesman said that H&M would give way to Zara clothing brand located in Spain.

The spokesman said, "The retail industry in Hong Kong has developed rapidly. The shops are always open and closed. This is very common in Hong Kong.". At present, H&M has 12 stores in Hong Kong, "the sales performance in Hong Kong and the mainland is good".

According to media reports, commercial rents in Hong Kong increased by about 20% in 2011, the highest proportion since 2008. But China's economic slowdown is likely to reduce this growth rate.

A report issued by Gaowei Global Real Estate Consulting Co., Ltd. in September last year pointed out that the three most expensive commercial malls in the world were Fifth Avenue in New York (16704 euros per square meter per year), Causeway Bay in Hong Kong (14426 euros) and Ginza in Japan (7750 euros).