1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Investment Research at:https:/ Listen

2、 to our insightsFind out moreHSBCGlobal InvestmentResearchPodcasts Retail sales grew for the second consecutive month;sentiment saw some support from positive wealth effect however,mall operators need to adapt to evolving consumption patterns;near-term rental pressure could remain Among landlords,we

3、 like Wharf REIC(1997 HK)and Hysan(14 HK),both rated Buy Another month of retail sales growth.Hong Kongs Census and Statistics Department reported that retail sales grew 0.7%y-o-y in June 2025,the second consecutive month of growth after a prolonged period of decline.In aggregate,retail sales went d

4、own by 3.3%y-o-y in 1H25,narrowing from a decline of 7.3%in full-year 2024.Visitor arrivals increased by 12%y-oy to c28m in 7M25,mainly due to a good resurgence in travel from mainland China,Taiwan and Thailand.Together with the positive wealth effect from financial markets,this helped provide some

5、support in spending activity,in our view.However,we believe most operators will continue to face rental pressure with negative rental reversion in the near term and need to adapt the evolving consumption patterns.Read-across from retailers and mall operators.The overall retail landscape remains chal

6、lenging,but we see signs of improvement.Hang Lung Properties(101 HK,HKD7.95,Buy)shopping malls in HK are still facing challenges with retail rent declines in 1H,while the tenant sales of its mall slightly outperformed the market (-2%y/y in 1H).On the positive side,HLP views the increased tourist foo