Hong Kong restaurant operator Tsui Wah Holdings is said to be offering for sale its flagship location in Central at an asking price of HK$400 million ($51 million), as the city’s ongoing civil unrest chips away at consumer spending.
The firm plans to list its 8,000 square foot (743 square metre) space at 84-86 Des Voeux Road Central, after shuttering two eateries in Causeway Bay last month, according to an account in the Hong Kong Economic Times.
The street-front restaurant, which includes an underground space, is located at the intersection of Jubilee Street and Des Voeux Road Central, opposite the landmark Central Market and the Central-Mid-Levels escalator. Hong Kong-listed Tsui Wah bought the two-level property in 2001 for HK$57.8 million.
The report comes as Hong Kong’s sweeping political turmoil and destabilizing protests have eaten into the city’s retail sector, with many shops and restaurants struggling to stay afloat. Retail sales dropped by 11.4 percent year-over-year in July, according to government data.
Prime Space May Defy Investor Caution
Tsui Wah operates 28 outlets in Hong Kong, 35 in mainland China and three in Macau. According to local real estate agents cited by the Hong Kong Economic Times, the company had quietly tried to sell the Des Voeux Road asset last year.
Although the turbulence of recent months has roiled the Hong Kong economy and put a damper on commercial real estate deals, the restaurant space maintained its valuation of HK$400 million thanks to its prime location, according to an agent cited by the newspaper.
The neighborhood rarely has large-sized shops for sale, and the property should be able to generate serious interest despite investors’ caution about entering the market now, the source added.
According to public data, a 4,000 square foot retail shop at 58-62 Queen’s Road Central changed hands last year for HK$100 million. The space about 350 metres south of Tsui Wah was sold to Jimmy Tang, chairman of Prince Jewelry & Watch, for the equivalent of HK$25,000 per square foot, representing a loss of HK$30 million.
Restaurant Chain Slims Down
Last month, Tsui Wah closed two locations in Causeway Bay, saving more than HK$1 million in monthly rent. The company walked away from a 3,488 square foot space at 483-499 Jaffe Road two weeks before its September 1 lease expiry.
Tsui Wah had leased the property for more than a decade, with rent said to be around HK$530,000 per month for the past three years. The space is currently listed with a rent of HK$450,000 per month, a 15 percent discount on what Tsui Wah paid, according to the report.
The restaurant chain also closed a 2,600 square foot outlet at 20, 20A, 20B and 22 Cannon Street, about 100 metres from the Jaffe Road location, in August. The property had been leased to Tsui Hua since January 2016 at HK$518,000 per month. According to Tsui Hua, the landlord’s redevelopment needs prompted the closure of the restaurant before the year-end lease expiry.
Tsui Hua began as a simple bing sutt – a café offering iced drinks – in Mong Kok in 1962 before opening the first location of the now-famous restaurant brand in San Po Kong in 1989.