Will Beijing Turn Into Detroit?

Unlikely, for a few key important reasons. But one Chinese blogger asked that question yesterday after Starbucks was forced to relocate due to high rents. The store is in the central business district of Beijing and even on weekends, traffic in that Starbucks was heavy. No matter, soaring rents forced it to leave.

Starbucks relocates flagship Beijing store due to sky-high rentals

Starbucks has been forced to move its first ever store in Beijing as its annual costs including rent and staff is estimated around seven million yuan (US$163,000) a year, while the company's average revenues in their shops in the Asia-Pacific area is around US$829,000, the paper said.

Here is the blog post: 连星巴克也受不了北京的高房租了 (Even Starbucks cannot bear Beijing's high rents)

It is normal and inevitable that the real estate bubble affects businesses due to rising rents, but when even big companies like Starbucks cannot bear the high rents, who is next? And after that one, will more businesses leave? So much that Beijing turns into Detroit? Only God knows!

Beijing won't turn into Detroit, but rents are reaching the upper limits if Starbucks was forced out of a prime location.