McDonald's(US:MCD) Guan Cha Zhe Wang·2025-07-30 07:30Core Viewpoint - McDonald's is planning to sell eight properties in Hong Kong, marking a strategic shift in its asset management approach in response to the declining retail market in the region [1][10]. Group 1: Property Sale Details - McDonald's is auctioning eight properties located in prime commercial areas such as Tsim Sha Tsui, Causeway Bay, and Mong Kok, with a total building area ranging from 6,746 to 18,746 square feet, built between 1969 and 1991 [1][3]. - The total market value of the properties is approximately HKD 1.2 billion, with the highest valued property being a street-level shop in Tsim Sha Tsui worth about HKD 460 million [3]. - The bidding process is managed by JLL, with a deadline set for September 16 [1]. Group 2: Strategic Rationale - McDonald's is undergoing a phased "clearance" of all its shop properties in Hong Kong, involving 23 locations with a total market value exceeding HKD 3 billion [7]. - The company stated that the sale is part of a routine optimization of its global asset portfolio and will not affect the daily operations of its restaurants in Hong Kong [9]. - The properties are owned by McDonald's Corporation, while the restaurants are operated under a leasing agreement by a consortium led by CITIC, which acquired McDonald's business in mainland China and Hong Kong in 2017 [9]. Group 3: Market Context - The current sluggish state of the Hong Kong retail market is a significant factor driving McDonald's decision to reallocate capital [10]. - A report indicated that rental prices for major street shops in Hong Kong fell by 3.5% in Q1 2025, marking the highest decline in six quarters [10]. - Despite a 11.9% year-on-year increase in tourist numbers, overall retail sales in Hong Kong decreased by 4.0% during the same period, leading to rising vacancy rates in core commercial areas [10].