Dynamite, it is said, comes in small packages. And Hong Kong's tiny 'match-box' shops pack a rental punch that puts them among the most explosively expensive retail outlets in the world.
'They're just like tiny match boxes but they command unbelievably high rentals on a per square foot basis,' said Tony Lo Chin-ho, a director of the retail department at Midland Realty.
'They can afford to pay such high rents because their location allows them to generate huge sales volumes.' Lo was referring to the maze of tiny shopfronts in Causeway Bay, some of which provide tenants with less than 100 square foot of space from which to conduct their business but which may command rentals of up to HK$170,000 a month.
Money changing is clearly one type of business that can flourish in a tiny but well-located and expensive space. For example, an operator of a money-changing business from a 95 square foot store in Cannon Street paid a Hong Kong record rent of HK$1,789 per square foot per month.
That translates into a monthly rental of HK$169,955 and is some 50 per cent higher on a pro-rata basis than the HK$864 per square foot per month paid by skin-care chain, Body Shop, for its nearby 880 sq ft store on Russell Street in Causeway Bay.
Other 'match box' outlets paying high rents in Causeway Bay include ice-cream sellers, jewellers, and news kiosk operators that sell magazines, pens, and lighters. Their ability to pay rentals of as much as HK$1,800 per square foot - a rate that works out even higher than rentals paid by shop owners on New York's fabled 5th Avenue at HK$1,000 per square foot - has raised not a few eyebrows, especially because of Hong Kong's reputation as one of the world's most expensive cities to operate a business.
In a survey released in June, property consultancy CB Richard Ellis said that Hong Kong ranked as the world's second most expensive retail location after New York. Average rents in New York worked out at the equivalent of HK$1,170 per square foot per month.
