Small Businesses are Priced Out of Hong Kong Market

Posted on 31 July, 2013 by Jodee Redmond

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.




Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Recent Posts

The best places to stay on the Riviera

The latest property data has identified Newquay as the fastest property seller’s market in the UK

Investing in your garden can increase your property’s value

French Riviera temping high-end homebuyers

How can the ownership rights of my commercial property impact a business sale?

Should I incorporate virtual property viewings permanently?

Investment expected to increase across Asia-Pacific in 2021

UK property industry slows as the conclusion of tax break looms

BNP Paribas cautioned investors on Friday as debt-trading bonanza that increased its earnings this past year

Over 300,000 property purchases fell through in 2020 – we show the most frequent motives and the best way to get your house sale back on track

House Prices in the Capital Surpass £500,000

Optimism from the Bank of England’s chief economist

The most expensive commercial properties.

Businesses operating from shared premises will miss out on grants

BA cuts 12,000 jobs, unions hit back

Media Streaming Service See Record Subscriptions