Introduction:The Shihan JingShe branch of Starbucks, located in the Shengtang Scenic Area of West Lake in Hangzhou and known as the "most beautiful Starbucks by West Lake," may face closure due to the upcoming expiration of its lease. This historic building, constructed in 1936, has been operated by Starbucks for nearly 15 years since 2007 and has been beloved by travelers and coffee enthusiasts alike. This article takes you through the historical background of this unique store, Starbucks’ development in Hangzhou, and analyzes the market reasons behind the frequent closures of scenic area coffee shops.
In the Shengtang Scenic Area of West Lake, Hangzhou, there is a two-story villa full of historical charm — Shihan JingShe. Since 2007, it has been a Starbucks location, and with its unique lakeside setting and elegant architectural style, it has been hailed by many coffee lovers as the "most beautiful Starbucks by West Lake." However, this distinctive café, which has been in operation for nearly 15 years, is now facing the expiration of its lease and may be coming to the end of its business chapter.
Recently, this historic building by West Lake was officially listed for lease and generated intense interest during the auction. After hundreds of rounds of fierce bidding, it was ultimately sold foran annual rent of 2.521 million yuan— nearly 700,000 yuan higher than the starting bid — demonstrating that the commercial value of this location remains considerable. The original lessee voluntarily waived their right of first refusal under equal conditions, meaning that Starbucks is very likely not to renew the lease, bringing an end to over a decade of operations here.
Built in 1936, Shihan JingShe is not only a historic building in Hangzhou but was also once the former office site of the Hangzhou Municipal Committee of the Communist Party of China. Since leasing it in 2007, Starbucks transformed this lakeside villa into a highly distinctive lakeside coffee space, becoming a popular spot for both tourists and locals to take photos and enjoy leisure time. Among the many Starbucks stores established in Hangzhou, the Shihan JingShe branch has always enjoyed high online visibility due to its prime location and unique ambiance.
According to the auction notice, the building is currently still in use by the original lessee, who has stated they will not exercise their right of first refusal under equal conditions. The new tenant will take over the property as-is, including the building’s condition, area, and water and electricity configurations, all based on the actual onsite situation. Future business operations will continue to focus on a coffee bar, as well as retail of pre-packaged food and handicrafts, maintaining the existing commercial types.
Although the Starbucks store is still operating normally for now, staff have not received any clear notice regarding when it will close. As for why Starbucks is not renewing the lease, the company has not provided any official explanation. Some analyses suggest that, in addition to rising rental costs, changes in tourist flow in the scenic area and intensifying overall market competition may also be factors prompting the brand to adjust its layout.
Since entering the Chinese market in 1999, Starbucks has openedover 6,000 storesin more than 230 cities across the mainland. Its site selection strategy has always emphasized urban purchasing power and the degree of internationalization. Although Hangzhou is positioned as a second-tier city, Starbucks has as many as324 storesin the city, ranking third among all cities in China — only behind Shanghai and Beijing, and even surpassing first-tier cities such as Shenzhen and Guangzhou. This figure also reflects the vast potential of Hangzhou’s young consumer demographic and the city’s continuously growing economic vitality.
For many coffee enthusiasts, the Shihan JingShe store is not only a great place to enjoy coffee but also an excellent spot to collect limited-edition cups. According to feedback from multiple customers, the store often releases exclusive designs of tumblers and merchandise, with diverse styles and collectible value. Many cup designs are rarely seen at other locations, attracting visitors who come specifically for the cups.
However, in recent years, impacted by the pandemic and fluctuations in the tourism market, visitor traffic to scenic areas like West Lake has noticeably declined, presenting operational challenges for coffee shops dependent on these sites. In fact, this is not the first time a Starbucks store in a Hangzhou scenic area has closed — earlier this year, the Lingyin branch ceased operations, and now the Shihan JingShe branch is also about to follow suit, signaling a new round of adjustments in the scenic area coffee market.
As the lease expiration date approaches, many customers have been sharing their fond memories of this store on social platforms, while also expressing curiosity about the future use of this historic building. Whether the new owner will continue coffee operations or transform the space into another cultural, F&B, or retail format remains to be seen. But one thing remains unchanged: this lakeside building has created unforgettable coffee moments for countless visitors and has become a unique chapter in the coffee history of West Lake.
The above content is compiled by CoffeeHunters, a coffee news website.
