dumplings

Hong Kong Rents Push Out Mom and Pop Stores

HONG KONG — Nam Kee Noodles is a typical Hong Kong restaurant: functional, popular and busy.

A dozen plastic-topped tables offer room for about 40 patrons. Customers line up outside at lunchtime, waiting to consume spicy noodle soup, dumplings and iced soy milk amid the clatter of plastic bowls and chopsticks.

In April, however, the little restaurant, in the heart of Causeway Bay, one of Hong Kong’s busiest shopping districts, nearly had to shut down after the landlord tripled the already-expensive rent.

“We were paying around 200,000 dollars a month,” said Au Kei-hong, the shop’s manager, referring to an amount in Hong Kong dollars equivalent to about $25,800. “But the landlord then increased it to 600,000. It was too expensive. We cannot afford that.”

After frantic negotiations, Mr. Au agreed to a smaller — though still steep — increase that has allowed him to stay put for an additional year.

Others have not been so lucky. Soaring rents have forced at least three small businesses on the same Causeway Bay street to move or close in the last few months, and similar tales of woe are common among small businesses in other prime areas in the bustling, crowded city.

Rapid growth and sweeping economic changes have raised retail rents in many of Asia’s growing metropolises in recent years. But nowhere have they reached the heights of Hong Kong, a banking, logistics and trading hub that many companies see as a testing ground and launching pad for the vastly larger mainland Chinese market.

Hong Kong’s residential property prices have fallen from their recent highs mainly because of government measures intended to cool demand — but those measures do not affect retail rents.

“It’s a normal phenomenon for small retailers to be squeezed out by high rents. It happens everywhere,” said Joe Lin, executive director of retail services at the real estate services firm CBRE in Hong Kong.

“But in Hong Kong, the pressures have become very severe in the last two to three years — it’s very unhealthy. Luxury and jewelry now dominate 90 percent of the space in prime locations,” Mr. Lin said. “The whole trade mix in some of these areas has changed.”

Causeway Bay, where Nam Kee Noodles is struggling to survive among high-end clothing and watch retailers, commands the most expensive retail rents in the world: an average of 1,950 Hong Kong dollars, or $251, per square foot per month, according to figures for the first quarter of 2013 from Cushman Wakefield, a real estate consulting firm.

Two other Hong Kong neighborhoods, Tsim Sha Tsui and Central, also rank among the five most expensive locations in the world — with Fifth Avenue and Times Square in New York — easily topping luxury shopping destinations like the Champs-Élysées in Paris and the Ginza in Tokyo.

That has squeezed out many of the colorful mom and pop stores — hardware shops, fruit stalls, herbal medicine vendors, restaurants — that form a large part of Hong Kong’s business ecosystem, changing the face of many neighborhoods in the process.

A few minutes’ walk from Central, which is home to Hong Kong’s financial district, Ngau Kee Food Cafe, which for many years sold traditional Cantonese dishes to diners perched on rickety stools, closed in April after the landlord raised the monthly rent to 120,000 dollars from 49,000.

The restaurant’s owner, Mak Ping-kuen, says he hopes to reopen in another part of town but has struggled to find a site.

“I hope we can reopen as soon as possible. My customers are getting impatient,” he said.

Nearby, two popular bars in the SoHo district have closed in the last few months, again because the owners could not afford big rent increases.

And Tsui Yuen Desserts, which sold delicacies like ginger-flavored milk custard and sweet black sesame soup for less than 20 dollars a bowl (about $2.50), had to relocate from Causeway Bay to Wan Chai, a neighborhood more geared to night life than to hungry tourists.

Article source: http://www.nytimes.com/2013/07/04/business/global/soaring-rents-in-hong-kong-push-out-mom-and-pop-stores.html?partner=rss&emc=rss

DealBook: This Inside Goldman Deal Comes Steamed, With Sauce

Ángel Franco/The New York TimesThe Rickshaw Dumpling truck often parked near the old offices of Goldman Sachs on Broad Street; above, at Broadway and 55th and 56th Street.

Kenny Lao has the kinds of credentials — a master’s in business administration from New York University and a former job as a Wall Street analyst — that might come in handy when pitching business to Goldman Sachs.

But the only deals he had to offer Goldman were stuffed, steamed and served in packs of six.

Mr. Lao is the co-founder of Rickshaw Dumpling Bar, a Manhattan restaurant that has been serving up dumplings since 2005. This week, Rickshaw was invited to sell its dumplings inside Goldman’s cafeteria, an 11th-floor outpost inside the firm’s gleaming skyscraper at 200 West Street in Lower Manhattan.

“It looks like ‘Gattaca,’” Mr. Lao said of the bank’s commissary, referring to the 1997 science-fiction film. The cafeteria features sleek chairs and futuristic décor and windows overlooking the Hudson River. “It’s so far from my dirty, gross life on the street.”

Goldman’s dumpling connection began several years ago, when Rickshaw operated a food truck that often parked near the bank’s former headquarters on Broad Street. When the firm moved to the new building in 2010, Rickshaw found it harder to park nearby.

“So many Goldman people e-mailed us, telling us to come to 200 West,” Mr. Lao said.

This winter, a Goldman representative asked Rickshaw to sell dumplings for a week in its cafeteria, which on most days features sushi, a carving station and upscale menu items like truffled macaroni and cheese. Mr. Lao jumped at the opportunity.

“The truck business is very cyclical,” he said. “For us to have the opportunity to be indoors at a company where we have fans is great.”

Mr. Lao has been observing his Goldman clientele with interest. They tend to eat lunch in regular shifts, he said, around 11:35 a.m., and 12:15 and 1:30 p.m. They prefer the pork and chicken-based dumplings to the vegetarian option, an edamame-based dumpling with lemon sansho dip. (“A very meaty crowd,” he said of the bankers.)

And despite the firm’s food-stocked headquarters, he said he hasn’t noticed any visible heft in the work force.

“There are all these skinny Indian girls and ex-rowers from Princeton,” he said.

Goldman declined to comment.

Mr. Lao, a 1998 graduate of Brown who worked briefly at Putnam Investments after college, has even seen several of his old college classmates during his Goldman stint. “They’re all managing directors now, and they come up to me and I’m sweating through lunch,” he said. “It’s a little degrading.”

Goldman’s cafeteria, which is run by Aramark, often features guest chefs and food brought in from New York restaurants like Hill Country. At a coffee bar just outside the cafeteria, employees can buy La Colombe coffee and cookies from Bouchon Bakery, the high-end establishment founded by the chef Thomas Keller

Rickshaw, which has three Manhattan locations in addition to its truck, has done a brisk business this week — selling as much as it normally does during a busy summer week, according to Mr. Lao.

Asked if he had picked up any insight on Goldman’s finances as the bank heads into earnings season, Mr. Lao laughed and said he had not.

“I know they’re bullish on dumplings,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=adce252114137e4b8737463abd19548f

Hong Kong Rents Push Out Mom and Pop Stores

DealBook: This Inside Goldman Deal Comes Steamed, With Sauce

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