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Blockbuster evicted by Hong Kong's property gatekeeper

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The refrain 'the best things in life are free' might ring hollow in Hong Kong but surely there is a still a place for the simpler pleasures, like a night in with a video and perhaps a pizza.

But even this cannot be taken for granted any more after Blockbuster, the world's largest video chain, decided to up stakes and leave Hong Kong. Twenty-four stores and 200 jobs will go over the next 18 months as leases expire.

It does seem strange that this global leader, which can operate 8,000 stores successfully in 29 countries, can find no profitable prospects in Hong Kong.

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Blockbuster blames high rents - but if the landlord puts up your rent, the answer is to move, is it not?

Unfortunately, that is not so simple in Hong Kong's tightly controlled property market, where hordes of customers reside in self-contained developer complexes such as South Horizons or those in Tseung Kwan O. Move next door and it is likely you will have the same landlord or his partner. Move too far away and the customers - who predominantly get around on foot or public transport - will not follow.

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So, in the absence of relocation opportunities, landlords control effective mini-monopolies with which to grant retail rights to their captive residents. This, of course, leads to a hard bargain, especially when some landlords might also have pay-television ambitions of their own.

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