F&B’s performance the highest post pandemic

KOWLOON WEST TO BECOME THE HEART OF HK’S OFFICE MARKET

Businesses looking to establish or upgrade their office should start looking into Kowloon West where multiple developments are underway.

A report by Colliers said Kowloon East is expected to become one of the fastest-growing Grade A office submarkets in Hong Kong, especially with the construction of two government projects, Lantau Tomorrow Vision and Northern Metropolis.

The two mega projects will pave the way for different office clusters to develop around Kowloon Station, Cheung Sha Wan and the New Development Areas (NDAs) in the New Territories.

Currently, there is only one Grade A office building in the Kowloon Station Area, which is strategically located at the junction of the Tung Chung Line, Tuen Ma Line and cross-border XRL.

In the next five years, it will supply the second-highest amount of new Grade A office facilities (2.4 million sq ft) after Kowloon East, equivalent to 17% of the total new Grade A supply in Hong Kong between now and 2026.

The next Grade A office

Colliers added that 29% of the next five-year Grade A office supply (202226) will also come from Kowloon West. The supply’s total size in the district is also expected to increase from 6 million sq feet in March 2022 to 9 million sq feet by 2026.

By 2026, the district will also have 11% of the entire city’s Grade A office stock.

“The focus of the city’s future developments is going to shift from the East to the West over the next two decades amidst the bigger integration within the GBA development. We believe the emerging office clusters in Kowloon West will become alternative flight-to-quality locations, supported by the relatively low rents.

The performance satisfaction score of 6.4 is the highest posted in two and a half years

F&B’s performance the highest post-pandemic

Restaurants in Hong Kong were slightly more confident in their outlook for the food and beverage (F&B) industry, increasing to 39% in the second quarter of 2022 from 34% in the previous quarter, according to the Deliveroo Q2 2022 Restaurant Confidence Index.

In a statement, Deliveroo said Hong Kong restaurant posted the highest business performance satisfaction score in over two and a half years if 6.4 from 5.3 in the previous quarter. Around 36% were also more hopeful about the economic environment, up from 32%.

Many restaurants cited the consumption voucher distribution in April as a key factor in boosting business, with 65% of those surveyed believing that their revenue slight or significantly rose during the quarter because of it.

With the increase in spending due to the vouchers, 48% of F&B owners are considering promotional or marketing plans in line with the second phase of the Consumption Voucher scheme in the third quarter. Around 23% of restaurants already have promotional plans.

“Although the previous few months have undoubtedly been difficult due to the fifth wave of the epidemic, Hong Kong is still on the road to recovery, and we are hopeful that social distance-inducing policies will be further relaxed in the coming months,” said Deliveroo Hong Kong General Manager Andrew Hui.

“We are committed to helping restaurant partners make the most out of new opportunities in the market while preparing for any potential challenges under the evolving COVID situation,” he added.

F&B rebounding

The report also found that dine-in business performance improved in the second quarter, with 55% claiming their revenue from dinein business significantly or slightly rose compared to the previous quarter, whilst 19% said it remained unchanged.

Around half or 48% said they increased their staff during the quarter, and 55% have planned to raise wages in the third quarter to retain employees. It also found that 42% of restaurants were planning to hire more staff, and 26% planned to open new branches in the third quarter.

Meanwhile, many restaurants cited operating costs, including food ingredients and rents which are both at 39% as the highest pressure they experience over the spring and early summer months. This is followed by labour costs with 23% reporting a pinch in staff salaries.

Around 74% were very or slightly worrying about a rebound in COVID cases with the revival of longer dining hours and easing of social distancing measures, according to Deliveroo.

The real question is whether HK can keep its relative importance as an intermediator under the evolving global trend