Rents and prices for ground-level shops in Causeway Bay are soaring as global brands scramble to open stores in the second most expensive retail precinct in the world - raising doubts about how sustainable the trend is given the gloomy economic outlook.
Early this month a mainland-backed company paid HK$1.15 billion for a 23,000 sq ft shop at 108-120 Percival Street, close to Times Square - just a day after it went on the market. The previous owner had paid HK$330 million for the three-storey shop in 2005.
Two international brands, including Spanish fashion label Zara, are in talks to lease the shop at an estimated monthly rent of HK$5 million - far more than the previous HK$880,000 a month, according to people familiar with the negotiations.
'This huge increase in rent reflects its massive sale price,' said a property agent who did not wish to be named.
A Zara spokeswoman declined to comment. 'An announcement will be made once we open a new store,' she said.
It is understood the fashion chain will also pay HK$10 million a month for 47,000 sq ft of ground-floor space at Lane Crawford House in Central, after rival H&M's lease expires later this year.
But in Causeway Bay, even the tiniest of premises are getting big offers. A 200 sq ft ground-floor shop at 77-83 Percival Street received an offer of HK$200 million, or HK$1 million per square foot. Milan Station, which sells second-hand designer handbags, currently leases the shop for HK$160,000 a month.
