How a dying mall in Tsuen Wan was able to bounce back to life

May 07, 2019 16:24
Shop owners at T.mark have learned the value of banding together. Photo: Facebook

In Hong Kong, we hear a lot of stories about subdivided malls slowly dying. 

But T.mark in Tsuen Wan is an exception.

It’s been reported that an 84 square foot shop in T.mark has recently changed hands at HK$900,000, generating a 200 percent return for the seller.

T.Mark is a three-storey shopping mall about 25,000 square feet big.

An experienced investor bought it for HK$414 million in September 2012 and subdivided it into 230 mini-shops two months later, offering them at prices ranging from HK$2.33 million to HK$7.38 million.

Despite the rather expensive per square foot price, the shops were quickly sold out.

Why were these tiny retail spaces so popular?

An affordable lump sum and guaranteed rental income for the first two years were key attractions.

Many investors also believe that retail space could be a great source of income for generations, hence the strong demand.

However, this concept typically applies only to shops in prime locations.

Investing in shops is much more complicated than buying residential property. Shops located in different spots of the same street could have totally different fates.

In T.mark’s case, those tiny shops with an area below 100 square feet have very restricted use in the eyes of tenants.

It’s also difficult for the different owners of subdivided shops to coordinate in order to establish a unified rental policy and marketing position.

Prices plummeted subsequently.

But T.Mark is making a strong comeback of late.

Some owners have reportedly agreed to combine 30-plus subdivided shops into two or three bigger shops. That has lured some fast-food and snacks shops and help drive traffic into the shopping mall.

More owners have followed suit and banded together. Now nearly 90 percent of the space in T.Mark has been rented out.

This article appeared in the Hong Kong Economic Journal on May 7

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist