Rising rents killing the scents

PUBLISHED : Thursday, 15 September, 2011, 12:00am
UPDATED : Thursday, 15 September, 2011, 12:00am


Here today, gone tomorrow.

Uno Mas, a popular Spanish restaurant in Wan Chai, closed last month after founding partner Brian Moss said the landlord sought what he called a ridiculous rent increase.

Next week on Friday, the Fat Angelo's Italian-American chain will close its Elgin Street branch after 12 years on the premises in response to a demand for about double the rent it had been paying.

It's a familiar story. Fat Angelo's managing partner Andy Chworowsky says that although Elgin Street was already a busy restaurant area when the group moved in, hardly any of the same businesses are there now.

Fat Angelo's has been going for 13 years, and has closed four restaurants in that time - three of them in response to demands for up to four times the original rent.

'What happens so often here is that the landlord has a space that is difficult to rent,' says Chworowsky.

'Somebody such as ourselves comes in at the discounted rent that is offered, turns the site into something, and all of a sudden the landlord and everybody else see that this site works. Then there's somebody waiting to outbid you when the lease comes up for renewal. We've never taken one for less than six years, but there is no protection once your lease is finished,' he says.

Michelle Garnaut, who managed M at the Fringe for 20 years before it closed two years ago and who is still looking for a place where it can reopen, points out that the brevity of leases and inflexible building regulations also prevent the establishment of thriving restaurant businesses.

'What I think people forget is that the terms of the leases are so short. If you are going to do something properly, it takes time to build up a business and make enough money to cover the initial investment. Food costs are high, alcohol is expensive - and labour is expensive, and there's a shortage of it. All these things make it difficult, which narrows the field to big players. There is very little room for independents,' she says.

Restaurants that do stay the course often own the buildings they occupy. But they also have to offer food and service that bring customers back for more.

'The brightest burn out quickest,' says Chworowsky. 'Almost all restaurants that have stuck around for a long time are popular, everyday sorts of places that aren't flavours of the month. And you have to adapt to what your customers want.'

Chef Harlan Goldstein of Gold by Harlan Goldstein - who has been involved in opening six restaurants in Hong Kong, only one of which has so far closed - believes the food is the major factor in determining a restaurant's lifespan.

'I think a lot of restaurants serve mediocre food and don't offer consistent service,' he says.

'The customers will go once, they're not impressed and they don't come back. That's one of the big concerns. These molecular restaurants have a very short lifespan. People don't go. At the end of the day, the customer wants real food - real, honest, tasty food.'