Food and beverage tenants sought after by Hong Kong landlords keen on ‘building communities’

Hong Kong’s landlords are increasingly betting on restaurants to drive traffic and capture dollars from diners stuck in the city amid border closures, in a bid to boost tenancy sales.

Landlords are keen on securing food and beverage (F&B) tenants even though they tend to pay relatively lower rents, said Simon Smith, regional head of research and consultancy in Asia-Pacific at Savills.

“Dining out is the new vacation. F&B is attractive as long as travel restrictions hold. It helps drive traffic to the malls,” said Smith. “In terms of restrictions, restaurants are quite accessible compared with other entertainment venues.”

Landlords are “very likely” to convert more spaces to food and beverage use, added Smith. For instance, Wharf Reic has converted two shops on the main retail floors of Times Square into F&B outlets for the first time.

Meanwhile, Pirata Group will have opened 10 new restaurants by the end of 2021, including four at The Sixteenth – covering 18,000 sq ft in Swire Properties’ Taikoo Place in Quarry Bay. They include Italian cuisine at La Favorita and Tempo Tempo, as well as Japanese fare at Honjokko and TMK Funk & Rolls.

“We don’t just look at building office buildings, we look at building communities … F&B is a huge part [of that],” said Francesca von Etzdorf, senior portfolio manager at Swire Properties, referring to its Quarry Bay portfolio. “We have a long-term vision of our partnerships and we look at how we can support those relationships … in the longer term.”