McDonald's Corp. is harvesting its real estate equity in international markets such as Hong Kong. Let's talk about where these millions show up on their income statement.
The following is provided and written by Grok (the AI service by Elon Musk's X).
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McDonald's Corp. has sold (and continues to sell) several of its retail properties in Hong Kong as part of a broader asset disposal strategy.
Key Details
- Announcement (July 2025): McDonald's planned to sell eight prime retail properties (fully or partially tenanted by its restaurants) valued at around HK$1.2 billion (US$153 million). JLL was appointed as the sole agent for a public tender (closing September 16, 2025). Locations included Tsim Sha Tsui, Causeway Bay, Mong Kok, Kennedy Town, Tai Kok Tsui, Yuen Long, Tsuen Wan, and Tsz Wan Shan.
- McDonald's continues operating the restaurants as tenants under long-term leases, so operations are unaffected. Reports suggested it might divest more of its ~23 owned properties in phases.
Multiple individual sales have closed, often at strong profits:
- December 2025: A Kowloon property sold for HK$72.4 million (US$9.3 million) — part of the eight-property batch, with total proceeds from four sales reaching ~HK$333 million at that point.
- Yuen Long (three-storey property at Yuen Long Trade Centre): Sold for HK$77.4 million (US$9.9 million) to Acc Investment (originally bought in 1987 for ~US$1.2 million).
- Quarry Bay (Parkvale Place): Sold for HK$110 million to Uni Investment Development.
- Mei Foo Sun Chuen (Mount Sterling Mall): Sold for HK$93.5 million (US$11.9 million).
- Other sales have pushed cumulative proceeds higher (e.g., reports of seven shops disposed of by mid-2026).
2 comments:
McDonald's has already begun monetizing real estate assets in a number of U.S. urban markets. Any franchisee who believes their occupancy is guaranteed beyond their current franchise term should take a hard look at what is happening.
We've seen properties sold under several different structures: some where McDonald's no longer remains a tenant, some where McDonald's signs a long-term leaseback, and others where escalating rents are built into the agreement.
The Hong Kong transactions discussed here are not unique.
Stateside, McD is liquidating downtown big city real estate at a fast rate due to its increased value. If you own one of the stores on those sites, and are lucky enough to renew your lease term, look for your rent to escalate dramatically in the new term. Mine increased almost double!
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