The rising cost of rent isn’t exactly a new occurrence nowadays. In this economy, increases in rent have been a problem for millions around the world.  In Hong Kong, local favorites owned by small business owners are being forced to relocate due to uncontrollable rental costs.

Nam Kee Noodles is a staple in the Causeway Bay shopping district of Hong Kong. Seats can accommodate up to 40 people and lines are formed outside of the store during lunchtime. The restaurant is known for its spicy noodle soup, dumplings and iced soy milk. However, soaring rents are pushing businesses like Nam Kee Noodles out from the shopping district.

The cost to stay in business is overwhelming for these mom and pop shops. According to Cushman & Wakefield, rent in Causeway Bay has risen about 80 percent since mid-2010 and have more than doubled since 2007. Nam Kee Noodles had their rent tripled to almost $60,000 per month. “It was too expensive. We cannot afford that,” said Au Kei-hong, the stolre’s manager. Negotiations with the store’s landlord have allowed Nam Kee Noodles to stay in business for another year, which will probably be their last in Causeway Bay.

Businesses are feeling the pressure now more than ever, as stores haven’t been as lucky as Nam Kee Noodles. Tsui Yuen Desserts, which sold delicacies like ginger-flavored milk custard and sweet black sesame soup for about $2.50 had to relocate from Causeway Bay to Wan Chai. The store has far less customers stopping by for a bowl of dessert now that they’ve moved to Wan Chai, an area that doesn’t get too many tourists or shoppers.

High-end clothing stores are thriving in the area such as British owned Topshop and Japanese retailer Uniqlo, both which have opened stores in recent months. Taxes on high-end goods are much lower in Hong Kong than in mainland China, so these retailers are popular amongst tourists and visitors alike.

Luxury and jewelry stores are slowly dominating the area because they can afford the high rent costs. Restaurants, hardware stores and herbal medicine vendors are all being squeezed out of the area. These mom and pop shops however, are vital to the balance of the Hong Kong ecosystem.

Source: New York Times