High rent has forced one of the major food courts to move out of Westgate Mall in downtown Shanghai.
Food Republic China closed its food court in the basement of the building on Nanjing Road W. on Monday after its 15-year lease expired. Food Republic opened its first food court on China's mainland in the building, and it attracted 3,000 to 4,000 diners daily.
Retail rents have been a major concern for business owners, especially in downtown areas.
"Food Republic is very likely unable to afford the rental on Nanjing Road W., where rents continue to rise," said Raymond Wei, director and head of retail department of DTZ East China.
Knight Frank and Beijing Holdways Information & Technology Co said in a joint report earlier this month that retail property rent will continue to climb by double digits in major domestic cities fueled by rosy prospects in the retail sector.
According to a survey by the Chain Store and Franchise Association, retail rents gained an average 30 percent nationwide last year, and in some cases soared up to 100 percent.
A Food Republic official said it's still seeking a suitable location to continue its business and its expansion plans will proceed, Oriental Morning Post reported yesterday.