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McDonald’s sells Hong Kong shop outside disposal plan for US$11.9 million

Latest sale of Hong Kong restaurant site by the Chicago-based food chain reflects a retail valuation reset as rents stay subdued

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McDonald’s Hong Kong announced that from January 1, the average salary increase for restaurant management groups will be 3 per cent. However, the company is also selling off restaurants across Hong Kong as the retail property sector remains under pressure. Photo: Sam Tsang
Peggy Ye
McDonald’s has sold another Hong Kong retail property for HK$93.5 million (US$11.9 million), extending its asset sell-down and bringing total proceeds to about HK$580 million.

The ground-floor unit at Mount Sterling Mall in Mei Foo Sun Chuen, Lai Chi Kok, was sold on February 27 to Huge Power (China) Ltd., according to Land Registry records.

Companies Registry filings show the directors as Kwok Chong-wah, Kwok Lap-yin and Kwok Shun-sing, members of a veteran investor family.

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The 6,915 square foot (642 square metre) shop, near an MTR station exit, was sold at about HK$13,500 per square foot.

Land Registry records show McDonald’s Restaurants (Hong Kong) Ltd. will continue to lease the premises under a 20-year tenancy agreement running until 2036.

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The Chicago-based fast-food chain bought the property in 1988 for HK$27.4 million and has continued to operate a restaurant there. After holding the asset for 38 years, the company recorded a paper gain of roughly HK$66 million.

The transaction was not part of the eight retail properties McDonald’s put up for tender in July last year, as part of a review of its Hong Kong real estate portfolio.
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