When Italian deli Il Bel Paese saw the lease for its Happy Valley shop come up earlier this year, it was in for a nasty surprise. The landlord, who holds a number of shops in the area, asked for rent of HK$140,000 per month - nearly twice what it had been.
Founder Massimo Sfriso says the company was lucky to find a space nearby, which meant customers did not get lost in the shuffle of a major move. Still, the company went from a store that was just under 2,000 square feet to less than half that size.
Rent-based relocations such as Il Bel Paese's are routine in Hong Kong, where thriving home-grown shops are commonly dealing with a doubling or trebling of their rent. Local entrepreneurs face - at the least - vastly increased costs, causing serious disruptions to their businesses. Customers often have to deal with the loss of a much-loved local vendor and a constantly shifting retail landscape.
'For our type of business, it was not reasonable at all. It didn't make sense,' Sfriso, who founded the deli 10 years ago, says of the rent rise he faced. 'They said there were some other people offering as much. For the landlord, of course, it's a game. If you have found someone willing to pay what you ask for, we don't have any grounds to remain.'
Price hikes of 100 per cent are the norm when leases are up for renewal in the city's most popular shopping streets, brokers say. Russell Street in Causeway Bay now has the second-most-expensive stores in the world, at rents of US$125 per square foot per month, according to property agency Knight Frank.
Rents in Queen's Road Central, Russell Street and Canton Road in Tsim Sha Tsui have all doubled in recent years.
Hong Kong risks losing home-grown restaurants and family-run businesses as rents zoom ever higher. Multinationals with deep pockets are keen to tap the tourist demand in Hong Kong, especially from the mainland. They see Hong Kong as the centre of an Asian growth plan as their home markets are struggling.