Yu Ming sets low rents on mall shops
Firm puts pressure on Causeway Bay rivals by offering below-market rates
Yu Ming Investment, which owns two complexes in Mongkok, is putting its new HK$500 million shopping centre in Causeway Bay on the market at well below prevailing rates, a move that could put downward pressure on rents charged for similar shops in one of the city's premier retail areas.
The firm bought the first three floors of a building on Percival Street near Times Square for HK$350 million last year and has subdivided it into 99 shops, ranging in size from 104 square feet to 555 sqft each.
The monthly asking rent for shops at the renamed Timeplus, once the site of a well-known eatery, the Chuen Cheung Kui Restaurant, are HK$100 per square foot to HK$180 per square foot.
That is a steep discount to rents charged by Chinese Estates Holdings at its 157-shop Excelsior Plaza, now renamed Laforet, which range between HK$150 per square foot and HK$500 per square foot. All but two of the shops measure between 100 sqft and 200 sqft.
Fanny Lam, project director at Honnex Development, a subsidiary of Yu Ming, declined to disclose the annual rental income the company expects to generate from the new centre, though she said the rental income 'will hardly cover the interest expenses' on the building's mortgage. 'We will take a long-term view on this project,' she said.
Yu Ming spent HK$150 million renovating and promoting Timeplus which is targeted at female shoppers.
Sindy Tsui, leasing manager at Honnex Development, said a 2,180 sqft outlet on the ground floor had been leased by electrical appliance retailer Citycall for HK$360,000 per month.
A spokeswoman for Chinese Estates shrugged off the potential competition, saying 90 per cent of its 46,000 sqft shopping centre was leased.
The company is subdividing 66,000 sqft on the ground floor and basement of Windsor House near Victoria Park into about 200 small outlets, a move the company expects will triple its rental income. The spokeswoman said it was too early to determine rent levels.
Timeplus is not Yu Ming's first venture into mini malls.
The company owns 150 shops at Mongkok Centre which it rents out for about HK$200 per square foot a month. Leases covering about 30 per cent of those shops were up for renewal this year, Ms Lam said and so far rents had risen by as much as 20 per cent.
Last year, Yu Ming bought the second and third floors of Ginza Plaza in Mongkok for HK$160 million.