Carrie Lam's Son Flees US

Chief Executive Carrie Lam with her son Joshua

 

Just a quick follow up to Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor and the sanctions imposed on her and 10 other local and Chinese officials by the US Treasury Department.

I had mentioned Lam's son, Joshua Lam Yuek-hay, 26, was studying at Harvard -- a PhD in mathematics -- but now it turns out he suddenly left the US to go back to Hong Kong due to a "family emergency".

A picture of Lam with his classmates

Reporters from FactWire News Agency tried to contact Lam in Boston, but was told by his landlord that he had been missing since July 25, and two days later left a Facebook message to his flatmate that he had to return to Hong Kong because of a "family emergency".

The landlord also received an email from Lam on July 27, agreeing to renew his lease for another year. However, he did not reply to subsequent emails to sign the lease attached to them, though he did pay rent for the month of August.

His roommate said Lam did not pack up all his belongings.

The landlord also tried to phone Lam, but the call was restricted by US carrier Verizon. One of the reasons listed on the website could be because of an outstanding phone bill.

While FactWire asked the CE's office to confirm if Joshua Lam is in Hong Kong, Apple Daily was able to track him down in the city, but there were no further details... yet. Maybe that's because he's in quarantine?

FactWire's timeline of Joshua Lam's disappearance

Very strange, but also perhaps the impending economic sanctions on his mother forced the younger Lam to leave the US.

Earlier Carrie Lam had told the media she would laugh off any penalties from the US, adding the sanctions would have no effect on her as she has no assets in the country.

Well, technically not anymore...

Retail Sector Continues to Sink

Shopping malls are practically empty, hitting the retail industry hard

Today Hong Kong reported just one new positive case of the coronavirus, and at the press conference this afternoon, reporters asked Dr Chuang Shuk-kwan, head of the communicable disease branch of the Centre for Health Protection if this signaled the start of the government possibly lifting the restrictions on gatherings and 50 percent capacity in restaurants and so on.

However Chuang again repeated her mantra that it was still too early to tell, that Hong Kong also had to consider the global situation, which she said was still not good, and also because the virus can be carried by asymptomatic people, it was best to still maintain social distancing, wear masks in public places and maintain good hygiene.

Dr Chuang says social distancing needs to continue

She is probably still waiting until at least over a week from now after the Easter holidays to see if there are any cases that are reported locally after many people gathered in beaches and hiking trails.

While the one new case is positive news for Hong Kong, there is a dire announcement from the retail sector, that some 10,400 workers will lose their jobs and 5,200 stores will close by the end of May, and probably even more will be shuttered later in the year.

The Hong Kong Retail Management Association released these statistics after surveying 152 firms that operate 3,345 stores and employ about 23 percent of the sector's workforce.

Association chairwoman Annie Tse Yau On-yee said 96 percent of the companies suffered losses during the pandemic, and the latest HK$137.5 billion government relief package would only delay the rise in the unemployment numbers.

Most people are staying at home to avoid possible infection

Companies could not benefit from the scheme of the government subsidizing employees' wages if shops were going to close.

She warned if the pandemic continued and there weren't enough relief measures, another 2 percent of employees, or 5,200 people in the companies it interviewed could expect to lose their jobs in May.

Also in the survey, more than half the respondents said rent cuts would be most helpful, though more than 84 percent said the reductions were not enough.

The survey revealed no landlords had heeded the association's call to charge rent based on business' turnover or offer rent relief for May and June.

Wonder if many of these landlords mentioned in this survey are the big tycoons who seem to think business is business and renters have an obligation to pay their monthly dues despite a global pandemic that is beyond anyone's control.

If the pandemic continues, more shops will close for good

Hong Kong has managed (so far) to flatten its curve significantly to single digits, but that's because a lot of people are not out shopping, nor do they have the appetite to do so with looming pay cuts or even job losses.

As a result that has impacted the retail industry profoundly, and if landlords want to continue having shop spaces occupied, then they have to step up and shoulder the burden too. They, particularly the tycoons, and large corporations, have the resources to ride out this unprecedented crisis.

How about giving back to the community to keep the economy going? Otherwise there is going to be a lot more empty shop spaces in Hong Kong than ever before.

Pleas for Rent Breaks Fall on Deaf Ears

One commuter suited up in hat, visor and mask on the MTR

In the last few days, it looks like there are more people are on the streets in Hong Kong, taking public transit, albeit with masks and the odd one wearing goggles and surgical gloves.

This evening I went to try a new restaurant in Sheung Wan and was shocked to see it completely packed with diners. It was as if the virus didn't even exist in this place.

Everyone wears masks while taking public transport

But for many other restaurants, they are hurting badly, thanks to eight months of anti-government protests and right after the coronavirus hit.

A restaurateur who owns a few places around town is looking glum. The other day we were in his newest restaurant that opened late last year and at lunchtime it's not packed, but it's a decent stream of business as well as takeout orders.

But it's not enough to cover the rent.

He says shopping mall landlords hardly budge at all when it comes to rent concessions. He heard some shop owners have banded together in the hopes that as a consortium they can have more leverage in dealing with the landlord, a massive conglomerate. Wonder how that is going.

Another entrepreneur with trending food brands in his portfolio, has decided not to renew leases with those shopping malls that have not offered any discounts on rent, and will boycott them. But will the landlord even care?

Many prefer to dine at home than eat out for dinner these days

One of the big landlords is Wharf Real Estate Investment Company (Wharf REIC), that owns Harbour City in Tsim Sha Tsui and Times Square in Causeway Bay, says the outlook for the city's economy was "pathetic" and "dire" in the near term.

"We feel Hong Kong is pathetic in the short term. It could take three months, six months or even nine months [for the COVID-19 outbreak to subside and the city's economy to bottom out], but we have no idea," Stephen Ng, the company's chairman and managing director said today during the annual results briefing.

"However in the long run, we believe Hong Kong is still a lovely place to do business. As long as we can walk through the current [crisis], it will be better."

Interesting he chose the word "lovely". I wouldn't describe Hong Kong as a "lovely place to do business", but Ng has said so.

Times Square shopping mall in Causeway Bay is empty

Maybe it's because he feels his company has the upper hand when dealing with their thousands of tenants who are all begging for some kind of rent concession?

But these tenants are literally going to go out of business or cut their losses short and close in the next few months if the coronavirus does not let up soon. Case in point: today I saw on Twitter that the University of Hong Kong will continue classes online until May 16! It is possible schools could be closed till May as well.

So... for the sake of keeping the Hong Kong economy somewhat alive, the city's big shot landlords should stop obsessing about their company's stock performance and consider giving their tenants a break in the rent. Isn't it better to have shop spaces occupied than vacant? An empty shopping mall is hardly appealing to customers...

Lin Heung Update

Lin Heung Tea House was very full for dinner on Monday evening

After we finished what we thought was our last meal at Lin Heung Tea House in Central, our waiter casually let us know that the place would reopen on March 1 as Lin Heung Cha Sutt or Lin Heung Tea Room.

I was very annoyed to hear this as we all thought this was the end of an era, but no -- somehow there was a last-minute reprieve from the landlord, developer CSI Properties.

The place is re-opening on March 1 under new management

Hong Kong Economic Journal reported that some of the staff had bought the franchise from the restaurant owners and managed to get a three-year lease from CSI Properties with rent at HK$400,000 a month.

The staff said they would continue to run Lin Heung like before...

Can they really make the rent, pay staff salaries, electricity, gas, food and so on to make a profit?

First of all, last year CSI Properties seemed reluctant to renew Lin Heung's lease because it owns 90 percent of the building, so many believe it was the end of the restaurant. Why did the landlord have a change of heart?

Second, where did the staff get the money to buy the franchise? They don't seem to be earning super high wages to afford not only the franchise but to take on that kind of a financial risk.

Can the staff keep Lin Heung going another three years?

Third, do they think they can turn the place around just by continuing doing what they did before?

We'll have to see what happens come March 1, but I can tell you I felt cheated that I didn't know the place was going to stay open. So many of us went to Lin Heung to say good bye when in fact there was no reason to say arrivederci in the end.

But why the restaurant is staying open is a mystery to me and time will only tell.

At the Mercy of Landlords

This hotel has a good location, so why does it need to be knocked down?

A property investment company that owns a hotel in Causeway Bay wants to tear it down and turn it into an office building.

SEA Holdings, a publicly-listed company, recently applied to the Town Planning Board to demolish the 29-storey hotel and turn it into a 22-storey office tower with restaurants and shops.

Why? Because it is more profitable to rent out space on a monthly basis than hire staff to look after hotel rooms and guests, and try to fill them on a daily basis.

Remember the Ritz-Carlton and the Furama in Central?

What's also contentious is that the hotel, the Crowne Plaza Hong Kong Causeway Bay is only eight years old so knocking it down would not only mean more waste in our landfills, but more importantly less rooms for visitors to stay in.

In Central there used to be a handful of hotels like the Hilton, Furama, and Ritz-Carlton; now it's only the Mandarin Oriental Hong Kong and the Landmark Mandarin Oriental.

How can the Hong Kong Tourism Board lure more visitors to the city if more hotels get torn down?

But it seems like there is actually a glut in the market when it comes to hotel rooms in Hong Kong -- many low to mid-range ones are struggling to be able to charge HK$1,000 a night.

The Murray Building will be turned into a hotel by 2018

For example Ibis Hong Kong in Sheung Wan,  charges just under HK$1,000 a night on weekends, but come weekdays, it's just over HK$600 a night.

One critic of the plans to knock down the Crowne Plaza says property developers don't lose a night's sleep squeezing as much as they can out of us, neither do landlords who double our rents -- they think someone else will take it.

That's why these people are called psychopaths.

But in the meantime, The Murray Building in Central used to be an office building and is now being refurbished into a hotel by keeping the outer shell intact.

Quick fixes aren't what we need in Hong Kong. We need a more visonary, steady approach to development. Knocking down an eight-year-old building is not the way to go.