High rents force shops to extend hours, creating Ginza-style districts
Developers respond with 'Ginza-style' projects to support round-the-clock trading and dining
Shops and restaurants in Causeway Bay are extending their opening hours to cope with soaring rents, a trend that has encouraged developers to build two "Ginza-style" commercial projects geared to supporting round-the-clock trading.
Property consultants believe the concept of 24-hour trading will catch on in the area, which has become the world's most expensive for prime retail space.
"The concept is sustainable for Causeway Bay which is a magnet for late-night shopping and dining," said Joe Lin, senior director of retail services at CBRE.
Soundwill Holdings said last week its proposed commercial project at 11 to 13 Sharp Street, just off Russell Street, which is the most expensive retail strip in the world, would feature a round-the-clock management service and individual air-conditioning facilities to cater for tenants' trading hours.
"The building design is suitable for occupiers to stay open for 24 hours a day if they wish," a spokeswoman said.
Space in the developer's proposed 32-storey "Ginza-style" commercial building, to be named The Sharp, will be offered for sale at an indicative price of HK$30,000 per square foot, or an entry lump sum of about HK$48 million.
Property agents said some restaurant operators have expressed interest in buying upper-floor space in the development, since the indicative prices were relatively competitive when compared with street-level space in the nearby area.
Soundwill said it would gear its bigger project at 1-29 Tang Lung Street, one block from Hysan Place, for 24-hour trading as well, but lease space in the new project rather than sell it.
Agents said the firm charged HK$800,000 a month at present for its street-level shop at Soundwill Plaza on Russell Street, but agents estimated that when the lease on the shop comes up for renewal, it could be priced at around HK$2.4 million a month.
A Soundwill executive director, Vivian Chan, said Soundwill would retain the ground, first and second floors at The Sharp for long-term leasing. The project is due to be completed in 2015.
Faced with the continuing rise in retail rents, a growing number of retailers in prime locations in several shopping and dining precincts, including Causeway Bay, are opening for longer hours to bring in extra revenue to justify the high rental costs.
United States fashion chain Forever 21, which pays HK$11 million a month for its outlet in the Capitol Centre, opposite the Causeway Bay MTR station, is open seven days a week until 2am; the supermarket chain Jason at Hysan Place is open for seven days a week until midnight; and Taiwanese mega-bookstore Eslite is open until 2am from Thursdays to Saturdays and on the eve of public holidays. It closes at 11pm on Monday to Wednesday.
A director of retail services at consultancy Colliers International, Helen Mak Hoi-lun, said prime retail space remained in demand despite the high rents.
"Ginza-style commercial projects operate more successfully in Causeway Bay than in other areas," she said.
At the Cubus, a 28-storey building in the area, the landlord of a 3,400 sq ft floor is asking for HK$55 per square foot, Mak said.