Page 52 - RLI November 2019

MARK FAITHFULL

Following

the Money

Mark Faithfull crunches the numbers as he looks at
analysis and expansion that reflects changing markets

rent CutS urged in hong LateSt Mid-Market F&B Chain FaCeS unCertain Future
kong aS retaiL SaLeS FaLL izza Express appears destined for a debt up with Five Guys Property Director Richard
draMatiCaLLy restructuring that could hit its lenders, as Collier recently. This year, burger chain Five Guys
hops in Hong Kong have resorted to Pthe UK-based international pizza chain is will open its 100th store in the UK, bringing its
heavy discounting to ease the drop in reportedly in early talks to refinance two tranches total portfolio across the UK, France, Spain and
Ssales brought about by civil unrest in the of borrowing worth a combined £665M. This is Germany to around 140 outlets. The aim of the Five
city and the US-China trade war. Retail sales part of a total debt that had reached £1.1bn by the Guys joint venture with the founding US business
in Hong Kong plunged a record 23 per cent in end of December 2018 and Pizza Express paid out and Charles Dunstone, Founder of Carphone
August – the most recent month for full results £93M in interest payments in 2018, a year in which it Warehouse is to open 10 stores per market per
- compared with the same month last year, reported a pre-tax loss of £55M, on sales of £543M. year over the next five years, according to Collier.
amid the double whammy of anti-government About half of the interest payments are made to Collier ascribes the success of the US diner-style
protests and the US-China trade war. The figure its Chinese parent company, Hony Capital. Founded chain to the simplicity of its offer, which allows it
dropped to US$3.76bn in August year on year, in 1965, Pizza Express has 470 outlets in the UK, to achieve great consistency and speed of service,
the Census and Statistics Department revealed. with a further 150 internationally and employs and makes it one of the fastest options on ‘dark
Regularly one the world’s most expensive 14,000 people. The company’s performance has kitchen’ platforms such as Deliveroo and UberEats.
retail rental locations, Hong Kong retailing has deteriorated in line with the broader mid-market, “Essentially, we do one thing — burgers and fries —
been decimated by protests which continue casual dining sector. Earlier this year, Pizza Express but we do it really well,” he said. “Typically, people
to cripple the city and raise the prospect of said underlying profits fell 7.7 per cent to £32.4M in have their food within six minutes and that means
further civil disorder or a potential crackdown the six months to the end of June. The chain opened that Five Guys is usually part of a person’s day or
from the mainland. Of the most recent figures, a only two new branches over the period and said night out, not the focal point. So people know what
government spokesman said retail sales by value the focus would be on improving existing sites and they are going to get, plus great service and our
registered the steepest year-on-year decline for revamping its menu. Discussing the market, I caught obsession with cleanliness.”
a single month on record in August, even worse
than that posted in September 1998 during
the Asian financial crisis. This prompted the
9,000-member Hong Kong Retail Management
Association to warn the worst was yet to come
and October’s retail sales could reach a new
low as anti-government protests showed no
signs of abating and the war of words between
citizens and government continue to escalate.
Association Chairwoman Annie Tse Yau On-yee
has urged private developers to cut rents for
retailers. Amid the ongoing chaos, tourist arrival
figures took a battering, slumping 40 per cent
in August year-on-year – the worst since the
outbreak of severe acute respiratory syndrome
(SARS) in 2003. The number of mainland Chinese
visitors – the largest sector – dropped more
than 50 per cent.

Shopping City târgu MureŞ to open in MarCh 2020
EPI Rockcastle, a real estate investor in Central and Eastern Europe,
is to open the newest shopping centre in the portfolio, Shopping City
NTârgu Mureş, in March 2020. Following an investment of €70M, the
biggest investment in the last period in the county of Mureş, the Romanians
from the north of the country will enjoy a premium shopping and leisure
experience in Târgu Mureş, street Calea Sighişoarei. “This project is one of the
most important projects on our agenda for the next year, our priority being to
respect the deadline, as well as all the quality and safety standards. We want to
offer to the Romanians from the north of the country a commercial centre that
responds to the highest demands, a policy we guide, in fact, in all of the projects
we develop,” said Alin Burlacu, Leasing Manager at NEPI Rockcastle. Built on a
space of 12.5 hectares, the new mall will have a rentable area of 40,000sq m
and will host new concepts from international and national brands of clothing,
footwear, accessories, beauty, sports and children’s items. More than 50 per cent
of the stores that will open in the mall will be new for the entire region.

50 RETAIL & LEISURE INTERNATIONAL NOVEMBER 2018