Home of HK$33 wontons could fetch HK$180m
A 1,000 square foot noodle shop that has survived in Hong Kong's cutthroat restaurant market for 38 years and boasts a Michelin star is in the news - but not for its lunchboxes.
Just a year after being sold for HK$100 million, the long, narrow shop space that houses Ho Hung Kee is up for sale again and could fetch nearly twice the price. The street-level shop at 2 Sharp Street East in Causeway Bay, the world's second-most expensive street for retailers, is now valued at around HK$180 million - including its 600 sq ft cockloft.
The Ho family, who have operated Ho Hung Kee since 1946, bought the shop for HK$350,000 in 1974, but decided to cash in on rocketing retail property prices, and last year sold the shop to an investor for HK$100 million on a two-year lease-back.
Property consultants said the wonton noodle restaurant currently pays about HK$125,000 a month in rent, and the lease is due to expire in mid-2013. Not counting utilities, salaries and food costs, that means Ho Hung Kee needs to sell 126 of its HK$33 bowls of wonton noodles a day, seven days a week, to cover the monthly rent payment.
Isaac Wai, a senior marketing manager at Ricacorp Properties said a 400 sq ft shop selling T-shirts at 9 Sharp Street East, opposite Ho Hung Kee, is paying HK$170,000 a month, while another at 7 Sharp Street East is being offered for lease at HK$200,000 a month.
'The shop could definitely pay HK$250,000 in rent a month, and if it changes hands at a higher price, it's logical for the new owner to raise the rent when its lease is due for renewal,' he said.
It is unclear how the property sale will affect the noodle shop, still run by the Ho family, according to a woman who identified herself as the owner.
'It's too early to say,' she said. 'We'll continue with business as usual because our lease hasn't expired yet.'
But she also said it would be tough to survive if the landlord raised the rent significantly.
'We only charge HK$33 for a bowl of wonton noodles. But thanks to our loyal customers, our business is still strong at the moment.'
The family plans to open a new shop in the soon-to-be opened Hysan Place in Causeway Bay, she said.
Yesterday, the property's owner appointed Colliers International to offer the shop for sale.
Pierre Wong Tsz-wa, chief executive of commercial property agency Midland IC & I, said the owner wanted to cash in on the retail boom.
'Due to tight supply, retail shops in Causeway Bay have fetched jaw-dropping prices,' said Wong, who estimated that the shop, with its proximity to Times Square, could fetch as much as HK$180 million .
Helen Mak, director of retail services at Colliers International Hong Kong, said two recent transactions in nearby Lee Garden Road had generated more than HK$200,000 per square foot.
'Space is scarce, so retail properties in the district are being snapped up the minute they come on the market because investors see the potentially high returns,' she said.
The monthly rent for Ho Hung Kee in the current market could go as high as HK$350,000, she said.