NELSON CHAU Ka-shu hopes to reopen his stereo store in Mong Kok's busiest zones, but his prospects look dim. The relentless gentrification of the sprawling, colourful old district has brought astronomical rents and fierce competition from chains.
'It's impossible to compete with major chain stores for price, variety and the size of their outlets,' says Chau.
Steep rent increases forced him to close his outlets on Sai Yeung Choi Street and Sai Yee Street two years ago - one landlord even doubled the amount. Since then, Chau has run his business from an office space, taking catalogue orders from regular customers.
Mong Kok's image as an idiosyncratic inner-city jumble, where toy shops and old-style bakeries sit cheek-by-jowl with brothels and massage parlours, is giving way to slick shopping precincts. Around Langham Place, shiny new fast-food and fashion chains have moved in to redeveloped streets to milk the heavy pedestrian traffic. Residents welcome the spruced-up surroundings, but spiralling property values are squeezing out many independent businesses, including Chau's Wing Ming Audio and Video Centre, which has been in Mong Kok for a decade.
According to Centaline Property Agency, rents in the area have jumped between 40 per cent and 100 per cent during the past two years. The lease for a 1,500sqft shop lot now goes for about HK$210,000 a month - more than double the 2004 figure of HK$90,000. Such high yields have tempted some entrepreneurs who own their premises to close their businesses and rent out the place instead.
Andrew Chan Wing-kit, an assistant professor in the Polytechnic University's school of hotel and tourism management, says it's almost inevitable traditional businesses and individual stores will be edged out because they lack financial muscle.