McDonald’s makes hay while the sun shines, selling its TST premises for HK$1 billion as trade war crimps retail property prices
- Fast food giant is seeking 15 times the HK$66 million it paid for the 4,260 sq ft property in 1989
- Transactions of retail properties worth HK$100m or more have dropped 56 per cent in the first quarter compared to the last three months of 2018
The US fast food giant McDonald’s is seeking to sell a prime street level shop in Hong Kong worth HK$1 billion (US$127.4 million), 15 times the HK$66 million it paid 30 years ago, but property agents say that very few investors will be willing to make such a huge investment in the current economic environment.
McDonald’s is seeking tenders for a 4,260-square foot shop (396 square metres) at Star House on Salisbury Road in Tsim Sha Tsui, currently occupied by the health and beauty chain Watsons, which has been renting the space for more than 20 years, according to JLL, the sole agent.
The property is valued at HK$234,741 per sq ft or around HK$1 billion.
According to Alex Lo, director of Midland IC&I, finding buyers for retail properties worth HK$100 million or more amid the trade war has become extremely difficult.
Data from Midland IC&I showed that were only 11 transactions over HK$100 million in the first quarter of this year, down 56 per cent from October to December. It was also the lowest since the third quarter of 2016.