Why Is This Lakefront les cafe Space Changing Hands?

The Starbucks store inside Shihan Jingshe, a 1936 historic building in Hangzhou's West Lake scenic area, is set to close after nearly 15 years. The leasehold drew hundreds of bids and sold for 2.521 million yuan per year, about 700,000 yuan above the starting price. Starbucks waived its right of first refusal, so the store will exit the site.

The new operator plans to keep the space mainly as a coffee bar with pre-packaged food and craft retail. The building once served as an office site for the Hangzhou Municipal Committee of the Communist Party of China and has been rented by Starbucks since 2007, becoming a familiar street coffee landmark on the lake among more than ten Starbucks stores in the scenic area.

Located in the Santang Scenic Area of West Lake in Hangzhou, Shihan Jingshe is a historic building first constructed in 1936. It has been leased by Starbucks since 2007 and is hailed by many coffee lovers as the "most beautiful Starbucks on West Lake." Recently, the leasehold of the property went through hundreds of rounds of bidding and was finally sold at 2.521 million yuan per year, nearly 700,000 yuan higher than the starting price. The original tenant has waived the right of first refusal, which means the Starbucks store that has operated for nearly 15 years is about to exit this prime scenic location. After the new owner takes over, the business format will still focus mainly on a coffee bar, pre-packaged food, and craft retail. This article sorts through the history of this store, Starbucks' store layout in Hangzhou, and the market factors behind the successive closures of coffee shops in scenic areas.

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The Starbucks Shihan Jingshe store by West Lake has already accompanied everyone for nearly fifteen years. Now, this store, which carries the lakeside memories of countless people, has been reported to be about to bid farewell to West Lake.

A few days ago, a property in the Santang Scenic Area of Hangzhou was listed for rent on a trading platform, sparking widespread discussion—it is precisely the Shihan Jingshe store that many netizens call the "most beautiful Starbucks on West Lake." Just the day before, the bidding for the leasehold of the building finally concluded after hundreds of rounds of bids. This two-story lakeside villa sold for 2.521 million yuan per year, nearly 700,000 yuan higher than the starting price.

Public information shows that Shihan Jingshe was built in 1936. It is a historic building in Hangzhou and was once the former office site of the Hangzhou Municipal Committee of the Communist Party of China. Starting in 2007, Starbucks rented this building and has operated there ever since. Among the more than ten Starbucks stores in the West Lake Scenic Area, the Shihan Jingshe store has long enjoyed the reputation online of being the "most beautiful Starbucks on West Lake."

Many media reports pointed out that the auction announcement clearly stated that the house is currently used by the original tenant, who has waived the right of first refusal under equal conditions. The quality, specific location, area, and water capacity of the leased house shall be subject to on-site display, and it is rented as is. The business format of the new tenant must still focus mainly on a coffee bar, pre-packaged food, and craft retail.

This also means that the Starbucks Shihan store, which has operated for more than ten years, will close, and the new owner who won the leasehold will take over the operation. According to media reports, the Starbucks store is still operating normally at present. When asked when it would close, staff said they had not yet received relevant notice. As for why Starbucks will not renew the lease for this property with an excellent view, Starbucks has not disclosed any information to the public.

Since entering the Chinese market in 1999, Starbucks has now laid out more than 6,000 stores in more than 230 cities in mainland China. As a high-end brand in the coffee industry, Starbucks has always been strict in site selection and has high requirements for a city's consumption capacity. Therefore, its number of stores can, to a certain extent, reflect a city's economic strength and level of internationalization.

Although Hangzhou is a second-tier city, according to incomplete statistics, the number of Starbucks stores in Hangzhou has reached 324. Among the top ten cities in China by number of Starbucks stores, Hangzhou ranks third, second only to Shanghai and Beijing, and even surpassing first-tier cities such as Shenzhen and Guangzhou. The dense concentration of Starbucks stores may be related to Hangzhou's relatively developed internet economy and technology industry—it is one of the second-tier cities most favored by young people nationwide, with a high proportion of young people, and the entire city is full of vitality and fashionable atmosphere.

On Dianping, it can be seen that besides its stunning scenery, the biggest highlight of this Starbucks store is its constantly updated cups. The variety of styles is especially rich, and many cup types cannot be found in other stores at all. If you are a collector of Starbucks cups, you will most likely stay for a long time each time you visit, dazzled by the choices.

In recent years, affected by the pandemic and multiple other factors, visitor flow in scenic areas has dropped sharply, so it is understandable that operations face certain pressure. In fact, this is not the first time a Starbucks in a scenic area has closed. The earlier Lingyin store closed in April this year, and now the Shihan Jingshe store is also gradually exiting. This is likewise inseparable from the current fiercely competitive coffee market.

After the news of the upcoming closure spread, it quickly sparked heated discussion, and netizens shared their memories of this store one after another. At the same time, everyone is also very curious: after Starbucks' lease expires, what will this building become?

Image source: Internet

The above content is compiled by CoffeeHunters, a coffee news website.