Restaurant operators regain a presence in Hong Kong
New trend also sees luxury brands incorporating food and beverage offerings into their retail businesses
Restaurant operators have regained their presence in Hong Kong’s retail market where an increasing number of top-end retailers have surrendered their spaces in the wake of weakening spending on luxury items and a decline in tourist arrivals.
JLL said that in 2013 food and beverage operators accounted for only 29 per cent of the leasing deals it handled. This year, that figure has increased to more than 50 per cent.
“There are in discussions with a number of overseas restaurants to open their first outlets in Hong Kong as part of their their Asian expansion plans,” said Michelle Chiu, an associate director at JLL’s retail department. “They come from the United States, Europe and Southeast Asia.”
A new trend of incorporating food and beverage elements into their retail businesses has been seen among luxury fashion brands, including Franck Muller and Vivienne Westwood. And then, there is the lifestyle concept, such as the collaboration between Mercedes-Benz and Maximal Concepts, which has led to the creation of Mercedes Me.
At more than 4,000 square feet, Mercedes Me has taken the space formerly occupied by Porsche Design and Geox on the ground floor of Entertainment Building in Central at an estimated monthly rental of HK$4 million. Meanwhile, Vivienne Westwood opened its first cafe in Tsim Sha Tsui and Swiss luxury watch maker Frank Muller has launched a fine-dining restaurant in Causeway Bay.
To capture growing leasing demand among restaurants, JLL has formed a seasoned food and beverage team to cater for the industry.
Terence Chan, head of retail at JLL, said the team will offer specialist services to local operators, international restaurant groups and new-to-market entrepreneurs alike.
“Apart from the traditional F&B agency services including site introduction, lease negotiation, location analysis, tenant representation and market entry strategy and analysis, we also provide project coordination services. We will assist the clients in liaising with the interior designers, licensing consultants, contractors and maintenance vendors for set-up of their restaurants,” Chan said.
Helen Mak, the retail services group head at Colliers International, believes the softening retail leasing market will provide more opportunities for the return of restaurants given the high rents the international brands could afford to pay just a few years ago.
“With a restaurant inside the shop, it will also help to retain customers inside longer as well as serving as a venue for promotional events,” Mak said.
She said shopping centres intend to allocate more space for restaurants in view of the difficult retail market.
But the rapid expansion of restaurants could increase direct competition as most shopping centres plan to devote more space for food and beverage operators.