F&B Shop Rents in Central Soared up 300% in past 15 years after SARS period. 3 times higher than retail rental index!
Rents for F&B Shops in Central has soared up by almost 300% in past 15 years after the SARS period, which was 3 times higher than the average retail rental index.
Hong Kong is marking 20 years tomorrow since the territory was handed over from Britain to China.
We have witnessed several events which have affected the shop rents over previous 20 years.
The SARS (severe acute respiratory syndrome) outbreak in 2002-2003 should have had the most adverse impact to not only the life and death of Hong Kong people but also the economy of Hong Kong. Property price and rental dropped to a record low.
According to government statistics, the retail rental has been increased by 100% between 2003 and 2017. A minor adjustment was happened during the global economic setback in 2009.
With no exception, rentals across all property sectors have been riding on an upward trend since the SARS has gone in 2013.
Dragon-i pays HK$690,000 per month
Let’s take a rental reference of a F&B shop leased to the same operator for 15 years:
Dragon-i paid HK$230,000 per month in 2002 whereas its current rent jumped up to HK$690,000 per month, i.e. 3 times higher than the original rent.
For smaller F&B shops on street levels in Central, the rental increment over past 15 years was even higher.
Too high shop rent resulted in more restaurant closures
Lacrucci has witnessed the substantial increment of F&B shop rents which has affected many restaurant and bar operators over the years.
Shop rental went extraordinary high during 2012 to 2016, which has driven some restaurants and bars in Central to relocate away from Central or move upstairs, or even worst to end with closures.
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