HK shops, eateries felled by soaring rents

HK shops, eateries felled by soaring rents

The anguished cry of fashionistas is in the air.

H&M, purveyor of affordable slinky clothing, bane of listless men waiting for their female partners - and a must-go haunt for Singapore tourists before the Swedish retailer opened at home - is shuttering its flagship store in Queen's Road Central at the end of this week.

Unable to stomach a doubling in rent to HK$14 million (S$2.3 million) a month for its 30,000 sq ft space, it is the latest victim of record rents in the city. The chain has 12 other outlets in Hong Kong, of which only one is now located on the island.

Over the past year, casualties have ranged from big chains to mom-and-pop stores, with eateries particularly vulnerable. Moving in are deep-pocketed luxury retailers, jewellery chains and cosmetic chains popular with tourists, especially those from the mainland.

Fast-food giant McDonald's, for instance, is abdicating its space in Russell Street opposite Times Square in Causeway Bay. It will be replaced by cosmetic chain Sasa, which will pay HK$1.58 million a month, triple the current HK$500,000.

At the other end of the spectrum, Ngau Kee, the hole-in-the-wall eatery famous for its beef brisket in Gough Street at Sheung Wan, closed in April. Its owner Mak Ping Keung, who was paying HK$49,000 in rent, said the landlord no longer wants to rent the space to eateries - presumably because they are less able to pay.

Hong Kong now has the world's most expensive retail space, with rent hitting US$4,328 (S$5,500) per sq ft per year in the second quarter of this year, according to a new study by real estate firm CBRE out this week.

But there could be some relief in sight, with analysts saying that they expect the growth to moderate, after jumping between 30 per cent and 50 per cent since 2011.

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