McDonald’s sells 11 Hong Kong properties amid deep retail slump
Fast food giant McDonald’s has found buyers for nearly half of its 23 retail properties in Hong Kong at premium prices, even as the city’s shop market remains stuck in one of its deepest downturns in decades.
In the past year, McDonald's has sold 11 Hong Kong properties worth over HKD900 million, according to property consultancy JLL. Eunice Tang, JLL's executive director of capital markets, stated that these sales prove investor interest in high-quality retail properties despite the overall downturn. Retail property transactions above HKD50 million have been slow since last year, but prime-location assets backed by established tenants have drawn attention from high-net-worth buyers.
McDonald's aims to sell all 23 of its retail spaces, valued at nearly HKD3 billion, while maintaining operations in existing locations. The sale will not impact the company's Hong Kong presence, which comprises around 256 restaurants primarily in rented spaces. Sales, totaling five in the previous year and six this year, are unusual for the current Hong Kong retail property market downturn.
Analysts note that property values remain more than 50% below pre-pandemic peaks as experienced investors continue to offload assets. The McDonald's properties were sold through sale-and-leaseback agreements, allowing the chain to maintain restaurant operations under leases of up to 20 years. Most properties offered rental yields of over 6%, providing investors with stable income amidst weakening rents and capital values.
Buyers included high-net-worth individuals, family offices, and seasoned private investors, such as local investor Ng Yin, who acquired three McDonald's properties worth HKD300 million, and veteran investor Chang Yen-hsu, who purchased two. Other investors included Malaysian developer MB World Group and mainland Chinese private investors.
MCD Real Properties, a company linked to McDonald's U.S. parent, owned the properties, which were initially acquired during the company's expansion in the 1980s and early 1990s. Stanley Poon, Centaline Commercial's managing director, attributed the disposal plan's success to the properties' quality and McDonald's phased-selling strategy.
The next phase might prove more challenging due to the higher ticket sizes, which limit potential buyers. Several properties, such as the Star House shop in Tsim Sha Tsui, remain unsold, but Poon believes location is less of an issue than the premium price tag and the less desirable basement portion of some properties.
Written by urgent.news from VnExpress Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
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