Sa Sa 40% pre-rented to Shang Shui Pu
The number of mainland tourists visiting Hong Kong has risen sharply, attracting cosmetic shops specializing in mainland tourists to expand in time and grab high rents. The pharmacy and cosmetics store concentrated in the area of Xinkang Street in Sheung Shui. The No. 72 floor store has just been pre-leased by the cosmetics chain Sa Sa International (00178) at a monthly rate of RMB 320,000, which is nearly 40% more than the current rental value.
Sources pointed out that on the ground floor of No. 72 Xinkang Street, the building area is about 1200 square feet. The tenants are now good-natured and have a monthly rent of RMB 230,000. The lease period is until the end of June this year. However, the recent landlord rented the property at a monthly rate of $320,000, and was immediately pre-leased by Sa Sa at a negotiated price of 267 yuan. The current rent for better-quality products soared sharply by about 39.1%, a rate that is rare in the area in recent years.
320,000 per month up 14% year-on-year
This time, Salsa had pre-leased the Xinkang Street shop at a high price because the brand did not have a stronghold on Xinkang Street. However, this street has always been a hot spot for cargo sweeping by Mainland tourists and therefore rented at an aggressive price. It is reported that Youyiliangpin has leased the site since 2003, and only 48,000 yuan in the initial period of monthly rent. Based on the latest pre-rental rent, the cumulative increase over the past 15 years has reached 5.7 times.
The pre-rent rent at the site was not only higher than the old rent, but also higher than that of the neighboring shop. According to the information, it is adjacent to No. 70 Xinkang Street. The gross floor area is about 1200 square feet. It was rented to a drug and cosmetics store with a monthly rent of $280,000 a year ago. The rent was about 233 yuan, which means that the rent for shops on the same street rose by more than 14 in a year. %.
Reliance on the Central Retail Zone continues to stabilise
According to Ding Liangliang Executive Director and Head of Hong Kong Commercial Department Lin Yingwei, both the number of visitors to Hong Kong and the volume of retail sales in Hong Kong have recorded an increase, which is positive for the market. In the four core retail districts, except for Central rents, which fell by 1.7% in the quarter, the rents in the other three districts have stabilized and even slightly increased by 0.5%. He expects that rents in the core area will be stable in the next six months, and the rents in Causeway Bay, Tsim Sha Tsui and Mong Kok will increase by less than 5%. However, there are many “Jipu” stores in Central, so there is room for a 5% to 10% reduction in rent. It is expected that there will be an additional 6 to 9 months adjustment before stabilizing.
For the transaction of the shops, according to the Land Registry, Wenhui Cuttlefish owner Wang Junxin spent a total of 99.5 million yuan to purchase underground 20-20A, Ashley Road, Tsimshatsui, via the New Guoji Investment Co., Ltd., with a building area of approximately 2,200 sq ft. About 45,000 yuan. The shop rents restaurants for $208,000 and the rental return is about 2.5%.
The original owner purchased the site for 52.88 million yuan in 2010. The company held a profit of 46.62 million yuan for 8 years, an appreciation of 88.2%.