Michelle Chiu
About Michelle
Michelle is currently Manager of Retail in JLL (Jones Lang LaSalle) . A foodie at heart, she assists food-related establishments, whether they are new-to-market entrepreneurs, international renowned chains or established operators to build and expand their presence within the Hong Kong dining scene. Her strong client networks, combined with her passion for food, gives Michelle an insider-scoop on the latest dining trends and gossip which she hopes to share with the readers of Foodie in the “Ask Michelle” column.
Jamie’s Italian
From famous London-based steakhouse Hawksmoor to South-African originated coffee-theme chain Mugg & Bean , Hong Kong has been topping the lists as the next hot destination for successful international F&B operators looking to expand. While this is great news for our Hong Kong-based foodies, many of these international Groups have found that locating the right space to house their first outlet in our bustling city, comes with a unique set of challenges; some of which have forced many of these groups to reconsider the move into Asia’s foodie capital.
Take Jamie’s Italian for example – we worked extensively with this client for over three years, from initially taking the JI International Group around Hong Kong to study the market, to showing the team various opportunities on both street-front and prime shopping malls, to shortlisting the sites that fit the client’s requirements, we went through quite a few hurdles before finalizing the deal for their first flagship which is due to open in July 2014 at The Midtown in Causeway Bay. And so, you may ask: what exactly are the kinds of challenges that international F&B operators like Jamie’s Italian face? Let us find out…
Struggle for Size
In a city where space is a luxury, especially amongst the prime retail areas where there is less than 1% vacancy, the most common challenge amongst international F&B Groups studying the Hong Kong market is finding a space that is large enough to replicate the’ look and feel’ of their concept which has proven successful in their home countries. For Jamie’s Italian, where all of their existing UK and international restaurants have at least 200 seats, this translates to a minimum of 6000 sq. ft usable space. Will Lyon, CEO of Big Cat Group, the Hong Kong based restaurant operator that has the exclusive rights to develop Jamie Oliver’s Italian restaurants, has firsthand experience of this: “We dedicate a large area for our kitchen- they need to be a minimum of 1800 sq. ft as the way that our kitchens have been designed is to cater for volume. We need at least a 7 – 8-meter pass where the open kitchen interfaces with the restaurant. Not only does this give customers the visual experience of seeing the freshly prepared and cooked to order food, it also makes the operating and processing side much more streamlined.”
Flagship Presence
When shortlisting the options for their first outlet in Hong Kong, international restaurant operators place strong emphasis on whether or not the site offers flagship presence. This is not only to draw customers to the restaurant, but also to build the brand. Despite Jamie Oliver’s fame around the world, Will and his team “rejected a few sites based on the fact that it didn’t offer the kind of flagship presence that [they] need for the brand”. He adds that for the continued success of the Jamie’s Italian brand, it is crucial to continually improve and build up the image of the brand in Hong Kong to tell their customers who they are. This is particularly important for Mainland Chinese consumers, who may not be as familiar with Jamie Oliver as their local Hong Kong counterparts. In addition to Hong Kong, Big Cat Group has the exclusive rights to develop the brand in Greater China and has keen plans to expand across the border once they have Hong Kong settled.
So what differentiates a flagship site from just an ordinary restaurant? This was a tricky question, even for a well-seasoned operator like Will Lyon, who used to hold a number key business development roles across Jardine Mathesons & Co.’s Restaurant and Aviation groups before his most recent position as General Manager of IKEA Hong Kong. “We have no prescriptive formula for what we are looking for- it can be on one floor, it can be on multiple floors. We can be very close to the street, we can be one or two minutes away. What we need is something unique- either a site with amazing architecture with high ceilings, a strong history behind it, or a great and easily accessible location with big signage”. Will shares that a unique part of the Jamie’s Italian brand is the design- each of their restaurants across the world is individually tailored to complement with the neighbourhood and characteristics of the building it is in. For example, for their upcoming site in Causeway Bay, the design team has created a separate retail area on the outside of the main restaurant for selling Jamie Oliver’s merchandise and possibly a Jamie’s Italian signature coffee van.
Rental Pressure
Finally, even after pinpointing a flagship site that can meet their hefty size requirements, it is quite common for international F&B groups to be discouraged by the substantial rentals they have to pay in comparison to what they are being charged back at home. However, as most local and existing operators can tell you, although space is at a premium in Hong Kong, this can often be offset by the high revenues that can be generated from the F&B market.
All in all, the formula for success in Hong Kong for international groups, is finding an optimum balance between visibility, size and rental. With their upcoming 12,000 sq. ft flagship in the brand-new The Midtown building, just a minute away from Russell Street in the heart of Causeway Bay, it seems like Will and the Jamie’s Italian Hong Kong team has mastered all the ingredients for yet another winning recipe.
For more details please contact:
Michelle Chiu
Manager – Retail
t: +852 2846 5807
michelle.chiu@ap.jll.com
www.jll.com
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