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Peggy Ye

McDonald’s has sold another Hong Kong retail property for HK$93.5 million (US$11.9 million), extending its asset sell-down and bringing total proceeds to about HK$580 million.
The ground-floor unit at Mount Sterling Mall in Mei Foo Sun Chuen, Lai Chi Kok, was sold on February 27 to Huge Power (China) Ltd., according to Land Registry records.
Companies Registry filings show the directors as Kwok Chong-wah, Kwok Lap-yin and Kwok Shun-sing, members of a veteran investor family.
The 6,915 square foot (642 square metre) shop, near an MTR station exit, was sold at about HK$13,500 per square foot.
Land Registry records show McDonald’s Restaurants (Hong Kong) Ltd. will continue to lease the premises under a 20-year tenancy agreement running until 2036.
The Chicago-based fast-food chain bought the property in 1988 for HK$27.4 million and has continued to operate a restaurant there. After holding the asset for 38 years, the company recorded a paper gain of roughly HK$66 million.
The transaction was not part of the eight retail properties McDonald’s put up for tender in July last year, as part of a review of its Hong Kong real estate portfolio.


Six of those assets in Yuen Long, Kennedy Town, Mong Kok, Tai Kok Tsui, Causeway Bay and Tsz Wan Shan have been sold. The portfolio was valued at around HK$1.2 billion when the plan was announced.
In January, McDonald’s sold a Causeway Bay property for HK$118.7 million. The buyer was identified as the same investor who had earlier acquired two other McDonald’s outlets in Kennedy Town and Mong Kok, spending about HK$300 million across the three transactions.
McDonald’s did not immediately respond to a request for comment.
Hong Kong’s retail property sector remains under pressure as rents continue to soften, prompting some investors and long-term owners to trim their portfolios, while cash-rich buyers take advantage of lower prices to acquire assets.
There were 92 shop sale registrations in January, down 25.8 per cent from a month earlier, the steepest decline among major property segments. The total transaction value fell 21.2 per cent to HK$1.3 billion.
Derek Chan, head of research at Ricacorp Properties, attributed the drop to seasonal factors and said he remained cautiously optimistic about the market outlook.
Recent transactions have typically been concluded at attractive yields, often above 5 per cent, underscoring the ongoing valuation adjustment in Hong Kong’s retail property market, where rental growth is expected to remain subdued or even decline.
Jack Tong, director at Savills, said prime street shop rents had fallen about 76 per cent from their peak after years of correction. With rental levels approaching a cyclical bottom, he expected core street rents to remain flat or rise by up to 5 per cent this year.


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Latest sale of Hong Kong restaurant site by the Chicago-based food chain reflects a retail valuation reset as rents stay subdued


Latest sale of Hong Kong restaurant site by the Chicago-based food chain reflects a retail valuation reset as rents stay subdued.


McDonald’s sells Hong Kong shop outside disposal plan for US$11.9 million

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Latest sale of Hong Kong restaurant site by the Chicago-based food chain reflects a retail valuation reset as rents stay subdued

Latest sale of Hong Kong restaurant site by the Chicago-based food chain reflects a retail valuation reset as rents stay subdued