Real estate market
Written by: Cai Weinan
2020-07-27 17:15
Last update date: 2020-07-27 18:47The number of confirmed cases of new coronary pneumonia in Hong Kong has risen sharply. The government announced that it will tighten its anti-epidemic measures, including the all-day ban on dine-in from this Wednesday (29th). The catering industry is the first to bear the brunt. Among them, the ground floor shop on Parkes Street in Jordan, which has been leased by Tsui Wah Restaurant, has just been renewed by the landlord with a rent reduction of more than 40%. The rent has returned to the level of 18 years ago, completely offsetting the increase brought by free travel. . A shop agent even revealed that the third wave of the epidemic is severe, and most restaurant leasing transactions may stop at any time.
According to market news, the ground floor of No. 77-81 Parkes Street, Jordan, and No. 81 loft, currently leased by Tsui Wah Restaurant, although the lease is still 9 months to end, the landlord has recently reduced the rent by 42.5% to 230,000 Rent renewed at RMB 50 per square foot.
The above-mentioned ground shop and loft, each with an area of 2,289 square feet, were rented by Tsui Wah Restaurant in 2002. At that time, the monthly rent was about 240,000 yuan. Afterwards, the retail catering market conditions improved after experiencing SARS and then opening up "free travel". In 2011, the rent has risen to 314,600 yuan per month. In 2017, the restaurant was renewed again. The monthly rent has risen to 400,000 yuan, a cumulative increase of more than 60%. The lease period is from May 2017 to April 2021. It is reported that Cuihua originally wanted to abandon the rent. Under the epidemic, the landlord was willing to drastically reduce the rent by 40% to 230,000 yuan, which is about 4.2% lower than 18 years ago.
In fact, the Hong Kong-style tea restaurant Tsui Wah Restaurant, which focuses on tourist business, has closed more than ten branches in the past year. For example, the shop at No. 244 Portland Street facing Langham Place, Mong Kok, with an area of about 2,300 square feet, has a monthly rent. As much as 860,000 yuan, but Cuihua abandoned the lease. The shop was recently rented by another restaurant for about 580,000 yuan a month, which dropped the lease by 32.5% or 280,000 yuan.
Agency: Catering leasing stops at any time
Regarding the government’s new stricter restrictions, Li Genxing, Chief Executive Officer of Shenghui Stores Fund Management, believes that this will greatly affect the business of stores. Because dine-in is prohibited, most citizens will stay at home to eat and prepare their own meals at work. He predicts that the new restrictions will have the greatest impact on shops with an area of more than 500 square feet. It is estimated that by the end of this year, the rents of shops in core areas will fall by 40% to 50%, and the livelihood areas are also estimated to fall by 20% to 30%.
Zheng Deming, senior sales director of the Commercial, Commercial and Investment Department of Ricacorp (Industrial and Commercial), said that due to the seriousness of the third wave of the epidemic, it is estimated that in the next one to two months, most of the restaurant rentals will be suspended and "don't let go." He also revealed that the company had previously negotiated for the lease of three restaurants, but the situation suddenly deteriorated and the three leases were expected to be shelved.
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