The first two floors of Chungking Mansions, the infamous and

ramshackle Tsim Sha Tsui pile that has housed generations of

backpackers and low-income immigrants, are to be redeveloped into a

new "Chungking Express" shopping mall to bring it more into

character with the changing face of the area.

Property investor Benny Ki, who purchased the entire first floor of

the building and 90 per cent of the second last year for

HK$200-million plus near the height of the Sars crisis, kicked off a

frenzy by prospective shopowners last Thursday when he put some 330

shops on the market.

The upper floors of Chungking Mansions, built in 1962, are filled by

numerous restaurants and low-priced guesthouses catering to low-budget

travellers who have complained for decades of fighting off rats and

cockroaches during their stay. By contrast, Chungking Express is

expected to attract trendy fashion and accessories retailers,

according to one analyst.

Ki would reap as much as HK$700 million by selling 330 shops in the

two-storey mall, property analysts said. The owner is expected to

retain some shops on the second floor. The mall, which has been closed

since 1998, is to be relaunched as early as next month after a HK$50

million face-lift. Under the new building plan, the 50,000-square-foot

second floor is to be divided into 360 small shops measuring 50-to-500

sq ft each.

Much of the first floor is open and unavailable for development.

Ki said he would retain 9,000 sq ft for long-term investment. Designs

remain to be finalised.

Centaline Property, the sole agent for the mall, said more than 90 per

cent of the shops Ki expects to sell had been snapped up already.

The hectic sales, which kicked off last Thursday evening, attracted

more than 300 prospective buyers on the first day. More than 150 shops

were sold at HK$9,000 to HK$27,000 per sq ft within three hours,

Centaline retail department general manager Stanley Poon said.

"The owner has raised prices 3-8 per cent during the three-hour

sales," he said, adding that prices of the remaining 40 unsold shops

would rise by another 8-20 per cent.

"It is not surprising to see an overwhelming response from retail

property buyers due to the rare supply of small-sized shops nearby,"

he said.

"We can only find such high-end shopping arcades at Ocean Terminal

and Harbour City, all with brand-name outlets there."

A promotional campaign for leasing is to be launched as early as this

month.

While the landlords have yet to fix the rental prices at this stage,

Poon said he believed the shops could be rented at HK$40 to HK$300 per

sq ft, up to current market levels. "I expect investors can receive a

yield of about 7-8 per cent," he added.

eli.lau@globalchina.com

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