A shop owner loses over HKD30 million due to its location in the worst-hit areas of the conflict, the worst in history.
The amendment crisis last year triggered violent demonstrations, damaging various districts. Plus, with the frightening COVID-19 epidemic, Hong Kong is no longer the shopping paradise. The retail business in traditional tourist shopping area is dull. Shop transactions with a massive loss in specific core areas are recorded. It is reported that a shop in Park Lane Shopper's Boulevard, Nathan Road, adjacent to the Tsim Sha Tsui Police Station, was sold for HKD40 million. The price is even lower by HKD28 million or 41.1% than its purchase price ten years ago. The loss is over HKD30 million, including service charge, which is the highest record for shop transactions with loss in Hong Kong.
Journalist (Lai ChiTin)
Market source indicates that the tenant of Shop 64, Park Lane Shopper's Boulevard, Nathan Road, Tsim Sha Tsui, is Loong Kee Watch & Jewelry. It covers 766 sq ft, with a width of about 15 feet and a length of about 45 feet, and its monthly rent is HKD90,000, with the lease until July this year. The shop was recently sold for about HKD40 million, with a rental return of 2.6%. It is reported that the owner had asked for HKD75 million yuan, and cut the price by up to 46.7% currently. The original owner bought it for HKD68 million in January 2010 and sold it after ten years, losing HKD28 million on book profit and the loss over HKD30 million, including the handling fee. Some real estate industry insider points out that it is the highest loss in the record for shop transactions in Hong Kong.
Dr. Edwin Lee, the founder of Bridgeway, expresses that the owner is lucky to sell the shop at HKD40 million under the current COVID-19 epidemic. He points out that Park Lane Shopper's Boulevard is "the hardest hit area among the hardest-hit areas," describing it is "no tourists, no local consumption, no food, no people at all."
Dr. Edwin Lee: The owner is lucky to sell the shop successfully.
He mentions that Park Lane Shopper's Boulevard has 68 shops, divided into ABCD sections, of which about 20 are held by large owners. Except for a batch of shops sold in 1986, sales have been rare in recent years. Section D, which is the closest to Tsim Sha Tsui, has both high market price and rent, and the market rent is about HKD200,000-300,000. Section A near Jordan District is relatively cheaper, with a market rent of less than HKD100,000.
The rent of shops may not be up to HKD80,000.
It is understood that the shop mentioned above is located in Section A, and several adjacent shops in the vicinity are all in short-term rent, vacant or closed. Dr. Edwin Lee says that the latest rent is HKD80,000 in this section, but the shop is still unable to be rent out, plus the return is only a little more than 2%, so the rent will be very likely to fall.
Since more than half a year ago, Tsim Sha Tsui has been the focus of many demonstrations. Tsim Sha Tsui Police Station has been surrounded many times, and the selling prices of nearby shops in the same area have naturally been dragged down. According to a market source, shop No. R, ground floor, 8A-8K, The Grill Room, has a covered area of about 300 sq ft and a door width of 10 feet, and the tenant is a take-out dessert shop. The original owner asked for HKD32 million but cut by 6.9% to HKD29.8 million due to the pessimism of the future market. And it is reported that the owner is willing to extend the negotiation.
The shop prices in The Grill Room has dropped by one-third.
Some market participants believe that the market value of the shop mentioned above in The Grill Room was about HKD45 million at the peak of the market in 2013-14. Last year, the market value dropped to about HKD30 million, and its book value has depreciated by about one-third in six years.
