Small Food Shops Shut Down – An Outlook of Property Rental and Price in Hong Kong

Posted on

You may have no chance to taste the beef offal from that famous old “13 Zuo Beef Offal” in North Point, Hong Kong, unless you go to Taiwan.

It is not the only one catering outletor food stall closed recently, as the increased rental in North Point, another local well-known Hong Kong traditional dessert house Wong Gei also got shut down. Wong Gei,“13 Zuo Beef Offal” and another food stall selling egg waffle and egg puff were known as North Point’s three dragons, many residents considered them as Hong Kong’s taste.

However, since the owners raised the rental after the Chinese New Year, the Wong Gei could never come back even though they had posted an announcement next to their door, saying they would open on the 11th day of the New Year. Wong Gei has changed their announcement as “contract came due and closed” and Shi Sang Zo Beef Offal chose to move to Taiwan, leaving the egg pull shop struggles for survive after the increase of rent.

On March 28, the last day of “13 Zuo Beef Offal” opened, a long line was outside the shop, the three-day amount prepared by owner was all sold in the morning and the owner had to buy more raw beef offal for the people in the afternoon. When the staff tried to stop people from lining more, being told the beef offal was not enough, the crowds were once chaotic.

Michael Lee, a regular customer who specially came to support the shop, said, “What a pity to see it closed. Every time I came to North Point, I came here no matter how long the line was. It’s just like a symbol of North point.”

Another customer, Lucy Yeung said, “I heard the shop is closing so I hurried here to buy some. Now old food shops in Hong Kong are decreasing and many small restaurants I had gone to when I was young are disappeared now.”

The owner, Tong King-Yip, told the media that the rental would be raised 20 thousand a month, which was unaffordable for them. “In Taiwan, it will be much cheaper, and the labor price there is also cheaper. All profits of the last day would be donated to charity as my return to the society.”

According to the report Q4 2013 Global Retail Rents released by CBRE in late February, Hong Kong was by far the world’s most expensive city for global retailers among 97 prime retail locations/markets, while prime rents in major markets such as New York, Paris and London continue to reach record-breaking levels.

“The limited supply, low vacancy rates, and the rental requirements from mainland customers are making Causeway Bay the most expensive rental location in the world,” said CBRE Asia’s Executive Officer Sebastian Skiff.

As Clemence Poon, an experienced financial analyst as well as investment trader indicated, the Hong Kong Property price kept in a comparative high level for multiple reasons.

“Since Hong Kong opened self-funded travel to mainlanders, it pulled up the rental in areas like Causeway Bay and Mong Kok, many retailers and food stalls had to leave and were replaced by the drugstores and jewelry stores because many of them just come to buy medicine or gold.  

“First, it is because the unbalance between supply and demand. Traced back to the history of Hong Kong real estate, after Hong Kong’s handover, former Chief Executive Tung Chee Hwa tried to control the property price but caused disastrous results. So the small businesses are forced to leave and the property owners only consider the profits they could make.

“Hong Kong real estate price had a huge increase in a few years ago and was pushed down by Chief Executive Leung, but that is not substantially. The increase is so sharp that people’s annual salary could not catch up with the pace. In the past, young people also could not afford buying their own house but they believed they could afford it one day if they work hard enough and reach the upper class. However, since 1980s, people started to feel hopeless and disappointed.

“Then when former Chief Executive Donald Tsang took the place, he changed the policy – let the market adjust the price itself. Since then, some people started to criticize the mainlanders push up Hong Kong’s property price. It could be one reason causing the unbalance between supply and demand,” said Poon.

Nowadays, the property price in Hong Kong is well known as expensive – an average over HK$200000 per square meter. Instead buying a flat, many Hongkongers have to rent a place to live in which makes the property agents industry prosperity in Hong Kong.

According to Hong Kong Rating and Valuation Department, rental price for Private Domestic has increased at least HK$40 per square meter in last two year, now the cheapest average rental price is over HK$200 for one square meter in New Territories and the highest is about HK$350 in Hong Kong Island.

That means the rent for a 40 square meter flat is over 8000 HKD in Sha Tin, but 14000 HKD in Central, each month! However, according to Hong Kong’s latest Quarterly Report of Wage and Payroll Statistics, cleaners are the kind of jobs with lowest average monthly salary – less than HK$8000.

The rental for commercial estate is even a few times higher, depended on where they located.

No wonder that “13 Zuo Beef Offal” chose to move to Taiwan.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s