Kwun Tong’s HK$30 million shop overtakes glitzy Causeway Bay
A retail shop in the industrial area of Kwun Tong recently sold for HK$30 million, outpacing prices in Hong Kong’s glitzy shopping belt
Telecom Digital Holdings, which operates a chain of retail outlets for mobile phones in Hong Kong and Macau, has paid HK$30 million for a shop in the dowdy industrial neighbourhood of Kwun Tong, topping the market price in the city’s glitzy Causeway Bay shopping district.
The 301 square foot shop at the Kwun Tong Plaza sold for HK$100,000 per square foot, according to a Thursday press release, a record that’s double the current commercial property price in Causeway Bay. The seller made a 130 per cent return from an initial purchase made in 2011, said Celeste Liu Ching-ping, manager of Sheraton Valuers, the agent for the transaction.
The rents and sales prices of arcade shops of Causeway Bay, where Apple Inc, DJI and other global brands locate their flagship stores, are among the highest in Asia by square footage. Several shops changed hands recently for HK$50,000 per sq ft, according to JLL’s director of capital markets Eunice Tang.
Telecom Digital’s Kwun Tong shop space will combine two subdivided lots, which currently generate a combined rental income of more than HK$90,000 every month. The first lot is occupied by a money changer, and the second a vendor of durian desserts.
“The shop is located at the corner and next to the escalator, it draws a lot of passenger traffic,” Tang said.
The transaction is further evidence of how the real estate prices of Hong Kong, already the world’s most expensive city to live and work in, continues to set records in every nook and cranny of the industry, as capital is diverted from residential into commercial space amid the government’s market-cooling measures.
Hong Kong’s April retail sales edged up 0.1 per cent to HK$35.2 billion, a second month of rebound after two years of contraction, further bolstering the rise in commercial property prices.
Dennis Cheng, sales director of Ricacorp Properties, said the city’s retail property market has stabilised as retail sales have improved.
Kwun Tong, located on the eastern side of the Kowloon Peninsula, was known as the city’s manufacturing industrial hub during the 1950s. These days, it’s been redeveloped into a residential area, while industrial buildings are increasingly making way for commercial space.
Built in 1986, Kwun Tong Plaza is a 15-floor commercial building where locals go to satisfy their tech cravings.
The first five floors of the plaza are crammed with shops selling computers, games, mobile phones and electronic gadgets, along with fashion boutiques and eateries. It’s often packed with customers, especially during the weekend, JLL’s Tang said.
The building also acts as a hub connecting the subway station with the industrial area of Kwun Tong. It is also adjacent to the APM shopping mall owned by Sun Hung Kai Properties.
Tang said the deal won’t serve as a barometer for prices in the area, as Telecom Digital is likely to use the space for its own outlet, and is therefore willing to pay above the market price.
According to Sheraton, selling prices of nearby retail arcade spaces averaged HK$50,000 per sq ft.
Telecom Digital plans to take over the shop when the existing leases expire in September and July next year, according to Sheraton.