A tiny Hong Kong store measuring just 12 square metres (130 square feet) has sold for more than €16.5m, as prices reach astronomical levels in a city ranked the most expensive for retailers in the world

Tiny Hong Kong store sells for €16.5m record

Friday 14 March 2014 14.51

A tiny Hong Kong store measuring just 12 square metres (130 square feet) has sold for more than €16.5m, as prices reach astronomical levels in a city ranked the most expensive for retailers in the world.

The southern Chinese territory was accorded the title by commercial real estate giant CBRE in February, as prime rents surpassed those of the most exclusive addresses in New York, London and Paris.

The shop, located in Hong Kong’s retail heart of Causeway Bay, sold at a rate of €128,007 per square foot, breaking a previous Hong Kong record of €86,451 per square foot, the South China Morning Post reported.

“Buyers probably think that Hong Kong retail prices are still on the rise,” CBRE Executive Director for Retail Services Joe Lin told AFP, saying the buyer may have thought the store was a good investment.

Mainland Chinese tourists will continue to visit the city in large numbers and will “keep the rent at a very high level”, Mr Lin explained.

He also said the ground-level shop, whose current tenant sells electronic appliances, was bought at such a high price because of the shop’s prime location in the district.

Lined with luxury stores, the area is near major shopping malls and attracts a large number of locals and mainland Chinese tourists.

Government figures show that visitors from mainland China accounted for 75% of the city’s tourist arrivals in 2013.

Retail rents in Hong Kong’s prime locations stood at €3,121 per square foot last year, beating runner up New York at €2,376 per square foot by a large margin, CBRE said.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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