A dollar a month rent for a shop, anyone?

Ben Kwok March 05, 2020 14:05

Don't you wish you're a landlord? 

Once you've got a property to rent out, you won't have to work anymore. You can just laze around all the days of your life while your tenants work themselves to death to earn the money to deposit in your bank account by the end of each month.

Financial crisis? Stock market crash? Epidemic? You probably won't be bothered. If your current tenants can't pay up, just kick them out and find other people to take up the vacant property.

That's why even Macau casino king Stanley Ho Hung-sun has utter derision for some property tycoons, once remarking: "They have become so fat that they can hardly put on their socks.”

Well, the truth is, not all landlords are heartless. Many of them understand and commiserate if tenants are having financial difficulties such as during the social unrest in the second half of last year and the coronavirus outbreak at present. 

Many of them are willing to reduce the rent while their tenants struggle to get over the hump.

Tenants, too, expect landlords to share the burden of living in hard times. So some would ask for a 20 percent rent cut (if they're shy), or 50 percent (which seems normal), and some won't even pay at all (if they're desperate).

There's one landlord who seems to perfectly understand the situation. Edwin Lee Kan-hing, founder of Bridgeway Prime Shop Fund Management, has built a fund for the purpose of offering shops at low rents.

A former startup entrepreneur who is also an avidly followed property market commentator, Lee is offering a 450 square foot shop space for rent for three months, and the price is HK$3! That's right, one dollar per month until the end of May.

The shop may be small. But even smaller space in the heart of Tsim Sha Tsui or Causeway Bay, just enough to sell siu mai and curry fishballs, could cost as much as HK$100,000 a month.

Lee's shop is somewhere in Shau Kei Wan. He prefers residents in the area who could use the space to sell surgical masks and hand sanitizers, for example, or offer healthcare services.

“This is kai fong price,” Lee writes on his Facebook page, meaning he's offering it in the spirit of neighborliness.

He says he prefers social enterprises or non-profit organizations to take up the space. He would even shoulder the usual management fees and other charges.

The shop, which he bought for HK$17 million two years ago, used to generate a monthly rental of HK$55,000, which was already below market price. 

Lee also has other shops for rent in Mong Kok, Tai Kok Tsui and San Po Kong, for which he is offering a 40 percent discount on rents in the first year. 

Perhaps the government can come up with similarly creative relief measures and landlords can imbibe the spirit of kai fong to help small businesses in these difficult times.

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Ben Kwok

EJ Insight writer