As property prices in Hong Kong continue to surge, even 20 square metre shops 17 kilometres from downtown are trading at record prices as the world-leading rates from Hong Kong island are pulling up markets more than half an hour’s train ride away in the New Territories.
While Causeway Bay continually ranks as one of the world’s most expensive places to establish a retail presence, a humble 213 square foot (19.8 square metre) clothing shop in Tsuen Wan’s Nan Fung Centre wins the title for the city’s priciest shop transaction this month after selling for the equivalent of HK$225,000 ($28,676) per square foot.
The owner of the shop in the 36-year-old community shopping plaza is collecting HK$48 million ($6.12 million) for the first floor space, with the deal setting a record for the district’s highest value per square foot ever. The transaction narrowly edges out a the HK$445 million sale of a space at 41 Queen’s Road Central, which sold for HK$224,269 per square foot, to win the title of July’s priciest retail deal in the city, according to data from Midland Realty.
The shop, No.A26, has been leased as a clothing boutique for a monthly rent of HK$90,000, with the least fixed until June 2019.
Phone Shop Operator Invests Big to Save on Rent
The seller, who purchased the shop back in 2007 for HK$14 million, saw a 240 percent, or HK$34 million, return by selling the property to a wholly-owned subsidiary of local telecommunications company Telecom Digital Holdings Limited on Thursday, local media revealed.
Sheraton Valuers manager Celeste Liu Ching-ping, the agent for the transaction, told the media that “the latest square-foot price of this shop is higher than some of the shops in core commercial area Causeway Bay”.
It is understood that, after the current lease agreement expires, the telecom firm will merge its new prize with its its own adjoining shop, a phone store managed by Telecom Digital that has been operating for years.
The phone retailer believes the purchase will benefit its business development in the long run “without having to operate under the pressure of fluctuating shop rents”.
Redeveloping Industrial Area Means Business
More real estate investors have been drawn to Tsuen Wan recently thanks to a trend toward redevelopment of factories and workshops in the traditional industrial area into commercial space.
In April of this year Stan Group, chaired by veteran investor Tang Shing-bor’s youngest son Stan Tang, announced that it had entered into a joint venture with tycoon Joseph Lau’s Chinese Estates to redevelop an industrial building in the district.
The Tang family purchased the 120,000 square foot asset last year from a factory owner for HK$450 million ($57 million).
In July last year an investor spent HK$19.8 million to buy shop A074 at the Nan Fung Centre, paying the equivalent of HK$123,750 for the 160 square foot space on the same floor as this month’s record-setter, according to property registry records.
Other investors for shops in Nan Fung Centre include Wong Dun-king, Hong Kong’s Many Wells Property Agency Limited president, who spent a total of HK$48.48 million in August 2017 for two shops.