The 45-year-old Kam Kee Cafe in Shau Kei Wan will be closing next month after the property owner asked for a 150 per cent increase in rent.
The cafeteria in an alley near 261 Shau Kei Wan Road is paying about HK$20,000 a month for the 650 sq ft premises. But the property owner wants HK$50,000 from January, an amount the cafe owner cannot afford.
Chan Gui-chou, 91, said the rent hike would make it impossible for him to run the small business, given the cost of food had also risen a lot already.
Serving beverages including milk tea and coffee from HK$11 per cup, and set meals with instant noodles and macaroni from HK$21, the new rent means Chan would need to sell about 4,545 cups of drinks or 2,380 set meals just for the rent.
"I just want to use the rest of the month to meet with my old customers. Although I am going to miss this cafe, I have accepted the reality already," Chan said.
He adds that many old clients who moved out of Shau Kei Wan had visited the cafe recently.
Chan started with a food stall in Shau Kei Wan.
Three years later, he rented the premises opposite his dai pai dong and he has been running the cafe since 1967.
His cafe shares space with another ground level retail store and the property owner is asking for HK$110,000 a month in rent for the total 1,000 sq ft space, according to Brandy Ho Hon-ming, sales director of commercial realtor Midland IC&I.
"The asking rent is within the market range although it may be slightly higher than expected," Ho said, adding that the entire premise might be leased for HK$90,000 to HK$100,000. "After the government imposed the BSD [buyer's stamp duty], some investors who used to be active in the residential market have moved to the retail and industry property market," he said.
"If the owner can lease out the property with higher rents, he may be able to get a better tenant or buyer," he said.
At another busier section of Shau Kei Wan Road, the rent for a 1,000 sq ft ground level shop at Tai On Building can be as high as HK$200,000, he added.
Pierre Wong Tsz-wa, deputy chairman of Midland IC&I, said that the rental of residential flats in Taikoo Shing had surged to more than HK$30 per sq ft.
Therefore, the rent of HK$20,000 per month for a 650 sq ft ground level cafe, which comes to about HK$30 per sq ft, is quite low, he said.