A leading European do-it-yourself and home improvements retailer will open its first store in Hong Kong in 2007 and expects to break even in 18 months. B&Q Asia, a subsidiary of Kingfisher - the world's third-largest home improvement retailer - yesterday signed a 10-year lease with Kerry Properties' MegaBox Development for 120,000 square feet of space in the Kowloon Bay project. B&Q, which is based in England and offers products such as ceramics, floor and ceiling materials, kitchen appliances and bathroom suites, is currently the biggest tenant for the East Kowloon site, according to MegaBox executive director Tom Tong Kwan-ki. The Kowloon Bay development will offer 1.1 million square feet of retail space. But an analyst warned that the concept of do-it-yourself would not work in Hong Kong because homeowners in general did not have the time, skill or inclination to do their own renovations. Another challenge for B&Q will be the fact that some building material suppliers offer 'rebates' to customers as a tactic to boost sales, something B&Q will find difficult to compete against. B&Q Asia chief executive Steve Gilman, who has been in Hong Kong for two years, said the company had been looking for retail space in the city for six years. Mr Gilman said the company's four Shenzhen stores were doing well, which was advantageous for the Hong Kong business 'because a lot of Hong Kong people have homes over the border'. He said his contact with locals and expatriates had confirmed the business potential of a Hong Kong store. Mr Gilman, who declined to reveal the rent, said potential customers included homeowners, tenants, interior decoration contractors, property developers, building management agencies and hotels. He expects the Hong Kong store to achieve a 5 to 8 per cent market share and admitted there would be competition with Swedish furniture giant Ikea, which has a store in Kowloon Bay. An analyst with a Japanese brokerage said many interior decoration contractors were used to buying equipment and building materials from small shops. 'If B&Q is really to compete with these shops, its product prices will have to be 20 per cent lower because contractors will take transport costs to eastern Kowloon into consideration,' the analyst said. B&Q has 600 stores worldwide, including 50 in China.