He said Sogo was a favourite shopping draw among mainland tourists, who represent about 30 per cent of the 5.6 million visitors that Disney estimates will flood in during the first year after it throws open the gates to its resort.

'[Sogo Tsim Sha Tsui] was fully let two months ago,' he said, pointing out that mainland tourists accounted for 25 per cent of Sogo's customer base.

Tenants in Sogo Tsim Sha Tsui, which will have 150 concessionaire counters offering more than 800 brands, would receive an 'appropriate discount' on rents as it is a new store, Mr Lau said.

'We have to offer some incentives to allow the tenants to grow their businesses,' he said.

In February, Lifestyle leased 115,000 square feet in the Amazon underground shopping centre on Salisbury Road for 15 years for the new store. The space was previously home to Teddy Bear Kingdom.

Mr Lau, announcing interim results yesterday, said he was confident that solid sales growth would continue in the second half.

A potential new supply of smaller shops in Causeway Bay would not pose a threat to the flagship Sogo store there, which also operated on a model that involved leasing small concessionaire counters to retailers.

'It is hard to find a department store with similar size to Sogo in Causeway Bay,' Mr Lau said.

Sogo has more than 400,000 sqft, he said, adding that changes to the retail line-up in Causeway Bay could be expected to lure more shoppers to the area.

Last Wednesday, Chinese Estates Holdings, also chaired by Mr Lau, said it planned to subdivide 66,000 sqft on the ground floor and basement of Windsor House into smaller shops. The move has prompted Seibu to close in July next year.

And Causeway Bay's largest landlord, Hysan Development, will not renew the lease with Japanese department store Mitsukoshi at the Hennessy Centre when it expires in September next year, fuelling speculation that the developer will also divide the space into small outlets.

Lifestyle International announced that its interim profit jumped 26.7 per cent to $234.3 million for the six months to June 30. Turnover rose 30.4 per cent to $967.87 million.

Lifestyle said that it would pay an interim dividend of 12.5 cents.

Net profit margin for Lifestyle's Hong Kong operation improved to 13.7 per cent, from 11.2 per cent a year ago. But shares in the company dived 3.96 per cent to close at $13.35 yesterday.

Sogo, which has an 18.5 per cent share of Hong Kong's department store market, generates average daily traffic of 89,853 shoppers. An average customer spends $385 per visit, up 10 per cent from $350 a year ago.

Sogo achieved sales of $25 million on May 28 - a single-day record since the store opened its doors in 1985 - during its annual Thankful Week promotion.