Sustainability - the up-and-comer in HK retail trajectory

Landlords and retailers in Hong Kong are adopting green initiatives towards a more sustainable shopping environment.

July 14, 2023

COVID-19 has significantly altered consumer behaviour globally, necessitating changes in the retail landscape. Shoppers are adapting to new buying habits and seeking fresh experiences, while retailers are exploring the latest trends to meet the evolving demands. In this rapidly changing environment, property developers and landlords have a unique opportunity to pioneer innovative retail concepts while upholding corporate social responsibility and social well-being.

As put forth by economist John Elkington, sustainability from the social, economic and environmental perspectives is set to drive the transformation of the post-pandemic retail sector. Forward-thinking property developers are already embracing this trend in their retail premises. For example, five of the key property market players in Hong Kong, including Sun Hung Kai Properties, Henderson Land, K11 Group, Swire Properties and Link REIT, have installed electric chargers in their shopping mall car parks, providing a green alternative for patrons to recharge their vehicles.

Swire Properties has introduced the “Green Kitchen” design certification, which recognises F&B operators that adopt smart and eco-friendly designs to conserve energy and trim costs. The Group also encourages its new and existing tenants to work with them on the possibility of green design implementation before commencing refurbishment or renovation work. Similarly, Hang Lung Properties has partnered with fashion giant LVMH to research and carry out measures to mitigate climate change, ranging from using renewable energy to waste disposal and recycling.

In the meantime, some real estate enterprises are leveraging on retail space for educational purposes, in order to engage customers and build corporate goodwill. One example is Link REIT, which has established a 6,800 sq ft experience centre in their Lok Fu Place in Wong Tai Sin. The centre is dedicated to promoting sustainable living through a series of workshops complemented by virtual reality (VR) facilities. Visitors can learn about the pressing environmental issues, such as agriculture, marine life, greenhouse effects, and biodiversity, at the centre.

Sustainability in the retail industry is not only limited to consumption aspects but also encompasses production practices. The Mills in Tsuen Wan, a technology-and-lifestyle label under the Nan Fung Group, has recently joined the fast fashion brand Zara to launch sustainable fashion made from polyester cotton - a type of recyclable material, available now in 11 markets worldwide. Besides, Delta Global, the leading luxury packaging manufacturer expanding its regional footprint in Hong Kong, reported a 36% proportional increment in the use of FSC-certified materials by their luxury clientele in 2022. These are some of the promising steps towards enhancing sustainability in the fashion industry.

As consumers and retail operators explore new buying and production formats, sustainable initiatives are bound to play a crucial role in rejuvenating the retail industry. By adopting environmentally responsible practices and fostering collaborative efforts, landlords and retailers can work hand in hand to shape the future of real estate for a better world.