Hongkong Land, the biggest owner of prime Central property, is to launch a $170 million modernisation of the retail podium at its Prince's Building to give the property what executive director Ian Hawksworth calls a 'Madison Avenue feel'. One of the main features of the renovation work will be the linking of the building's ground and mezzanine floors to provide two floors of shopping space, similar to a department store. Hongkong Land officials said the new space would be rented out as brand name flagship stores similar to the ones seen along Madison Avenue in New York or along Bond Street in London. Mr Hawksworth said the move was not a response to the difficult retail climate and added that despite the downturn in retail sales and the dramatic decline in tourist arrivals, such flagship operations could still attract a large number of shoppers in Hong Kong. He claimed local shoppers were still spending in Central while mainland shoppers were active as well. Retailers would consider it just as important to have a flagship store in Hong Kong as having one in New York, London or Osaka, he said. 'They will see this location as a billboard for future expansion,' Mr Hawksworth said. 'That is why we see the refurbishment of the building as providing more space for people who want to get more exposure - that sort of flagship exposure.' He said some of the refurbished space would be taken up by existing Prince's Building tenants as well as by new tenants. 'Our objective would be to house as many of the people we used to have [Cartier, Chanel] in order to maintain the brand names,' he said. Mr Hawksworth said the refurbishment of the 140,000 square feet of retail area, which would begin immediately and scheduled for completion in May next year, was in line with Hongkong Land's earlier upgrading of the Landmark. Refurbishment of the Landmark Atrium also cost $170 million and was finished in April last year. 'We started with the Landmark and that was part of the scheme,' he said. He said the refurbishment was part of Hongkong Land's '2000 programme' - a comprehensive three-year investment initiative to enhance Hongkong Land's ageing portfolio. Last year the company announced a redevelopment of nearby Swire House. Demolition of the building is to begin soon after the company receives vacant possession in September. According to Mr Hawksworth, rents in the refurbished Prince's Building would be higher than existing rents in some cases. 'I would say that by being able to put flagship stores all the way around the building we are capitalising on Ice House Street and Statue Square and their ability to generate rents more in line with Chater Road,' he said. 'What we are doing is taking high-value space and improving the image and providing the opportunity to improve on rents.' The company said it would lose $40 million a year in rental income as a result of the refurbishment.