Hong Kong’s iconic The Peak Lookout restaurant has its rent slashed in half as pandemic wipes out international tourism

The owners of the eatery famed for its location are now paying less than half the monthly HK$230,000 (US$29,300) they were paying pre-pandemic
The restaurant closed its doors briefly last summer as the pandemic wrought devastation on industries that relied heavily on tourist revenues

Coronavirus Hong Kong

Sandy Li

Published: 6:34pm, 26 Jul 2022

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One of Hong Kong’s most iconic restaurants has had its rent slashed in half as the catering and tourism industries reel from a two-year absence of international visitors.

The owners of The Peak Lookout restaurant, previously a huge draw for tourists with its prized location high above the city, are now paying less than half the monthly HK$230,000 (US$29,300) they were forking out on a lease signed in 2019, before the city effectively shut its borders to combat the Covid-19 pandemic.

The once-thriving restaurant closed for several months at the end of last summer, as the city grappled with wave after wave of coronavirus infections.

A new three-year lease was granted to Modern China International on July 16 for HK$112,000 per month, or 20 per cent of gross income, whichever is greater, according to the Government Property Agency website.

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That is 51.3 per cent lower than the previous lease and 94 per cent below the eye-watering HK$1.8 million the restaurant’s operator was paying in 2006 when the city was witnessing a property boom, according to records shown on the website.

“Besides taking into account the private market retail rents, the government’s renewal rate will also reflect the slump in tourist arrivals,” said Oliver Tong, head of retail at JLL.

The number of international visitors dropped 99.7 per cent to 18,710 in May, according to data from the Hong Kong Tourism Board, from 5.91 million in the same month two years earlier, before the coronavirus emerged.

“The Hong Kong government has been discussing the reopening of the border [with mainland China] but still no final decision. The retail market is still clouded by uncertainties,” said Tong.

The premises, which is restricted to use as a restaurant, measures about 12,900 square feet including an outdoor terrace. The indoor area covers 9,042 square feet.

The single-storey 19th century structure, classified as a Grade II Historical Building, is located at 121 Peak Road, between The Peak Galleria and The Peak Tower shopping complexes.

With its red, pitched roof, it has the appearance of an old English country cottage, with stone walls, arched windows and a visible chimney. It is considered a rare example of “arts and crafts” architecture in Hong Kong.

Modern China International has rented the space since 2001. Florence Chan Sau-ching and Epicurean Investments Limited are named as directors, according to records on the Companies Registry.

Epicurean Investments operated more than 20 dining establishments under multiple brand names including The Peak Lookout and Japanese Ramen Daimon as of the first quarter of 2019, according to its website.

The restaurant closed its doors temporarily last year as the pandemic wrought devastation on Hong Kong’s economy, particularly industries that relied heavily on tourist revenues.

“In preparation for our 2oth anniversary celebrations, we’re pressing pause on operations here at The Peak Lookout, starting from August 16, 2021,” says an entry from last year on the website of Epicurean Group.

When contacted by the Post, a staff member who did not wish to give their name, said the eatery had remained closed for “two or three months” at the time.

It is currently closed again, for renovation work, and aims to reopen by the end of September or early October, the person said.

The renewal of the lease at 121 Peak Road comes after Hong Kong’s high street shop rental index plunged to its lowest level in more than three decades in the second quarter of 2022.

The retail rental index, compiled by JLL, is currently 75.3 per cent lower than the all-time high reached in the third quarter of 2014. That puts rents at a level last seen in the second quarter of 1988, the consultancy said.

“Activity levels picked up in the second quarter as locally-focused retailers moved to take advantage of lower rents and improved availability in prime locations,” said Simon Smith, a senior director of research and consultancy at Savills, in its latest report on Hong Kong’s retail leasing market.

Activity picked up modestly in both core and suburban locations after a slow first quarter, mainly driven by food and beverage outlets, grocery and lifestyle stores, said Smith.