The most expensive shopping district in the world is not in New York, London, or Paris – it’s on Russell Street in Hong Kong. This 150-yard stretch of luxury stores is chock full of designer brands and caters to tourists from mainland China.
Over the last 10 years, the Causeway Bay shopping area in the former British colony has been transformed from an area that used to house grocers, noodle vendors and tea houses. Its unique character has been completely transformed, and small business owners have been squeezed out by rents that are twice as high as those being charged in New York and four times higher than London rates.
The city is starting to ask whether the loss of these small businesses will change the face of Hong Kong’s streets and stifle small business operations in the city.
Andrew Sheng, the president of the Fung Global Institute, a Hong Kong-based think tank, said, “The local businesses that cater for local tastes – that’s the real Hong Kong. That’s what Hong Kong people feel attached to, emotionally and culturally.”
High rents are nothing new in the Hong Kong market. The city has had a reputation as having one of the most expensive real estate markets in the world for several years. Other Asian cities have managed to hold onto small businesses, according to Mr. Sheng. He said that landlords in Tokyo want to have small business owners like sushi and ramen makers in their property. In Singapore, planning laws ensure that even the most upmarket districts have a “hawker centre” where local foods can be bought for cheap prices.
High rents combined with short leases are likely to discourage young people from starting their own businesses in Hong Kong. Two or three-year terms are the norm, as opposed to five and 10-year tenancies in the United Kingdom.