Hong Kong's community malls that people simply can't avoid

Hong Kong

FORGET Gucci and Rolex. Grocery stores, hair salons and tutoring centres may have the brightest future for Hong Kong retail as high-end malls get squeezed by forces beyond their control.

That's according to property consultants including Savills, Jones Lang LaSalle and CBRE Group, which all say that community shopping centres targeting local customers are better suited to weather a downturn that has battered luxury retailers.

In Hong Kong's biggest deal involving malls this year, Gaw Capital Partners led a group including Goldman Sachs in a US$2.9 billion purchase of 17 shopping centres located below public housing estates, where residents walk through the malls to get to their homes.

These regional malls are unique to Hong Kong, a densely populated city where space is scarce and apartments are often stacked on top of shopping centres, restaurants and offices.…