Postcard from... Hong Kong
Will the Hong Kong property bubble ever burst? Rental costs are more than four times higher than in London, according to CBRE Research, but there are fears that mainland China’s flagging economy could impact on the territory’s fortunes.
There are no signs of a slowdown when it comes to retail rents. In recent weeks, the McDonald’s on Russell Street in Causeway Bay, the most expensive shopping street in Hong Kong, was forced to close after its rent trebled to HK$1.58m (£130,000) a month.
The Golden Arches opened its first Hong Kong outlet – just around the corner from Russell Street, in Paterson Street, back in 1975. Back then, the rent was HK$64,500 (£5,439) per month on a 3,000sqft space next to the Japanese department store Matsuzakaya, the South China Morning Post reported.
It cited Joe Lin, senior director of retail services at property consultant CBRE, saying a similar space today in the Hang Lung Centre would cost as much as HK$3m (£250,000) per month, or the equivalent of 156,250 Big Macs. The McDonald’s on Russell Street is being taken over by the cosmetics chain Sa Sa, which will pay HK$263 (£22.18) per square foot in rent.
Two years ago, the classic Hong Kong brand Shanghai Tang went head to head with Abercrombie & Fitch over its prime flagship store location in Central on Pedder Street. Abercrombie & Fitch won the battle, but only after agreeing to a 250 per cent rent rise to HK$7m (£590,000) per month.
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