McDonald's rents Chai Wan shop for $280,000 after plans to offload all self-owned shops

McDonald's has rented a giant shop in Chai Wan for a monthly rent of HK$280,000, following reports that the fast food giant plans to offload all 23 self-owned shops. 

The company has rented a 4,800-square-foot shop at Walton Estate, Chai Wan, for HK$58 per sq ft, about 7 percent cheaper than the previous tenant. 

The landlord was asking for HK$350,000 per month at the beginning of the year, and later lowered the rent twice to HK$280,000.

Local supermarket ParknShop had been renting the shop since 1993 before moving out in recent years. The store was leased out to a hotpot restaurant for a monthly rent of HK$285,000 from 2022. 

There are currently 262 McDonald's restaurants in Hong Kong, including 23 in self-owned properties. Last month, the fast food chain put eight properties up for sale for a combined value of HK$1.2 billion. 

The portfolio comprises restaurants located in Tsim Sha Tsui, Causeway Bay, Mong Kok, Kennedy Town, Tai Kok Tsui, Yuen Long, Tsuen Wan, and Tsz Wan Shan, with gross floor areas ranging from approximately 6,800 to 19,000 square feet, according to exclusive agent Jones Lang LaSalle. 

The largest among them is the flagship store occupying the ground and basement levels of Star House in Tsim Sha Tsui.

McDonald’s first put the Star House property on the market in 2019 with an estimated valuation of around HK$1 billion, but the sale did not go through. The property’s value has since declined by about 55 percent amid a correction in the city’s retail property market.

The remaining outlets are likely to be offered next year, with the total market value estimated at nearly HK$3 billion, local media reported in July.