McDonald's Puts Kowloon Shop on the Market for HK$1 billion
May 28, 2019 - Tsim Sha Tsui
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.
However, 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.
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% from October to December. It was also the lowest since the third quarter of 2016.
But Raymond Fung, executive director of capital markets at JLL, said eight parties have shown interest in the McDonald’s-owned property.
He said the tender is likely to attract top property investors, family offices and listed companies in the health care and jewellery space.
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