Rent of first McDonald's small fraction of today's
City's first McDonald's graced Paterson Street site for HK$64,500 a month, compared with HK$1.58m for Russell Street outlet it's vacating
It's hard to believe now, with McDonald's forced out of its Russell Street premises by a tripling of the rent to HK$1.58 million a month, but when the US fast-food chain opened its first Hong Kong outlet around the corner in Paterson Street in 1975, it paid just HK$64,500 per month in rent.
The 10-year lease was for a 3,000-square-foot ground-floor space at 2-20 Paterson Street, which at the time was next to the Japanese department store Matsuzakaya.
Today, that same space in the Hang Lung Centre would cost as much as HK$3 million per month, or the equivalent of 156,250 Big Macs, based on data from a few years ago, according to Joe Lin, senior director of retail services at property consultant CBRE. A Hang Lung Centre spokeswoman refused to disclose the current rental rate for the same space.
Cosmetics chain Sa Sa, which is taking over McDonald's 6,000 sq ft space on the first floor of 8 Russell Street in October, will pay HK$263 in rent per square foot per month. By comparison, the first McDonald's ground-floor space around the corner cost HK$21.50 per square foot per month.
Still, Sa Sa's rent is a lot less than that for street-level stores in Russell Street, which in the second quarter of this year rented for some HK$1,800 per square foot per month - the most in the world - according to property agent Cushman & Wakefield.
The lease for the first McDonald's was signed in October 1974 and included incremental increases over its 10-year duration.
The "golden arches" sign on Paterson Street has long disappeared, with, in the place of McDonald's today, a sprawling HSBC branch and an outlet of electronics chain Broadway.
Lin said it was normal for fast-food businesses to be pushed out by high-end retailers who want to snap up top locations.
"However, it's quite unhealthy in Hong Kong that the rental growth rate in prime retail streets is largely determined by the consumption pattern of mainland Chinese tourists, as Hong Kong residents don't play any role here," he said.
"No other cities in the world are like Hong Kong, where the high-street retail rent is affected by the consumption pattern or the number of tourists from a single country."
The man who brought the first McDonald's to Hong Kong was the late Kenneth Fung Ping-fan, one of three sons of Fung Ping-shan, who co-founded the Bank of East Asia. The outlet opened its doors on January 8, 1975, with a grand opening a few weeks later. Official guests at the opening included the US consul general at the time, Charles Cross, who described the outlet as a "genuine corner of America".
Today, shoppers on Paterson Street can still get their McDonald's fix at the chain's Yee Wo Street outlet, just across the road from the original restaurant.