I mentioned a while ago about soaring home rentals making living in Hong Kong more challenging than before. This phenomenon appears to apply everywhere that the idea of moving out to a more reasonable accommodation seems no longer practical.
But while home renters find it a challengs coping up with rising property rates, property owners are basking in an era that promises plenty of opportunities.
For instance, it was an opportunity too irresistible to pass up for Lam Shek-yam, the owner of Leighton Bakery in Causeway Bay’s Matheson Street. With heavy heart, the owner was forced to give up selling his popular egg tarts and sausage buns to accommodate a tantalizing HK$140 million (US$18.04 million) offer for his shop location. He has been doing good business with satisfied customers for the past 28 years. For fans who will miss this spot, a sister outlet further still serves local favorites.
But who would take a pass at such ridiculous offer, especially when they realize Mr Lam bought that prime location for just HK$13 million (US$1.67 million) in 1996? Curiously, the location isn’t far away from that ‘crazy’ offer I thought about several years ago. But now I realize it’s the rule rather than exception because the area is considered one of the world’s most expensive places to rent retail spaces.
As property owners like Leighton Bakery’s Lam Shek-yam is cashing in to Hong Kong’s property boom, those who are renting their premises are in a tough position to deal with negotiating rents. There’s little doubt owners are demanding increases, as the market dictates, it’s just a matter how considerate or outrageous these raises may actually be.
The high rental rates has made Causeway Bay’s relocation turnover rate quite high, a boon for the moving business. Indonesian restaurant 1968, Time Square’s UA Cinema and Japanese restaurant Wallmann Market within the neighborhood were all ousted because of the same reason.
If big name businesses are not immune to soaring rental rates, let alone smaller players. And if these soaring rental rates are slapped at small businesses like local cha chan tengs (tea restaurants) or noodle shops which can’t significantly raise their menu prices, they are forced to move out (towards less conspicuous places) and make way to those who can afford the rate. The bottom line is that if someone is willing to take the price, no matter how high it may be, the owner is poised to keep it that way.
I can only imagine the Causeway Bay of the future as home to luxury boutiques, jewelry stores, luxury restaurants and outlets of big chain businesses. Devoid of small tea shops, bakeries and noodle shops, the area can then truly embellish its title as a pure shopping destination. But that’s not what we want.