Hong Kong's reputation as the emporium of the Far East is being enhanced and revolutionised as the retail sector retreats from the high street to embrace a new generation of shopping malls. Established shopping centres in Central, Admiralty, Causeway Bay and Taikoo Shing on Hong Kong Island are facing growing competition from new malls in fast-developing Kowloon. Shopping in Kowloon was until recently largely centred in Harbour City and Ocean Centre in Tsim Sha Tsui, Festival Walk in Kowloon Tong, Diamond Hill's Hollywood Centre and Telford Garden in Kowloon Bay. Langham Place in Mong Kok, APM in Kwun Tong, Kowloon City Plaza and Olympian City along the Airport Express line have since signalled the extension of the 'malling' concept in Kowloon. More large malls are opening this year - most notably the 1.2 million sqft MegaBox, developed by Kerry Properties, the 900,000 sqft EMax in Kowloon Bay, developed by Hopewell Holdings, and Elements at Union Square at Kowloon Station.Next year will see completion of i-Square in Tsim Sha Tsui, followed in 2009 by the Hennessy Centre redevelopment in Causeway Bay and a retail project by Evergo Holdings to give Tsim Sha Tsui's Tung Ying Building a facelift. It all pointed to the retail sector expanding in tandem with Hong Kong's healthy economic growth - creating thousands of new jobs - and a trend towards destination shopping at malls, said Fung Kin-keung, managing director of property consultant Jones Lang LaSalle Hong Kong. 'People are also looking for a lot more elements and concepts in shopping centres than before. They expect new names, new retail concepts, entertainment and even gyms and spas,' Mr Fung said. 'Hong Kong people have travelled a lot more over the past 20 years and have much greater expectations.' Closeted in air-conditioning with year-round temperature control, shopping centres offer sanctuary from Hong Kong's frequent high humidity and rainfall. The new MegaBox is focusing on large outlets, including the British home improvement giant B&Q's first store in Hong Kong and a huge 3D cinema. Newly opened SkyPlaza at Terminal 2 of Hong Kong International Airport goes one better with a 4D cinema incorporating smells, wind and even misty rain into film plots. Citygate in Tung Chung is making a name as a discount outlet for top brands to unload last season's fashion. 'By focusing on this concept, Citygate has expanded its market from the local neighbourhood to attract shoppers from all over Hong Kong,' Mr Fung said. Following a trend set by Tokyo's Ginza neighbourhood, 'vertical malls' of relatively small, specialised outlets are also emerging in high-rise buildings, especially in Causeway Bay and Mong Kok. Not to be outdone as Hong Kong rediscovers the tradition of 'shop till you drop', top-end shopping centres are investing in facelifts. Pacific Place is focusing more on designer brands, while Hongkong Land's The Landmark, Alexandra House, Chater House and Prince's Building are taking more iconic names, including Harvey Nichols and Louis Vuitton, creating 'one of the world's great shopping and lifestyle destinations', according to Hongkong Land brand manager Phyllis Leung. Rents have risen significantly in the past three years but are expected to ease as new malls open. Property consultant Savills Hong Kong noted in a research report that some retailers had been forced to vacate core locations because business growth could not keep pace with rising rent. But landlords were now taking a more realistic view of what retailers could afford and were being more flexible in rental negotiations, in particular for renewals of leases. Ann Wong, deputy general manager for leasing at Sino Group, which is expanding its flagship Olympian City mall in West Kowloon, said rent was not the ultimate factor for retailers. 'Growing sales and improvement in operational efficiency are more important,' she said. 'The main purpose of these improvements and value-added services is to provide a more favourable shopping environment. With higher occupancy rates and more traffic, a win-win situation can be achieved for all.' Mr Fung said: 'Shops often either pay a set rent or a percentage of their turnover, whichever is higher, so there is a lot of incentive for shopping centre landlords to ensure their tenants do well. 'This is why they monitor their tenant mix so carefully. It may sound easy but you can guarantee that landlords undertake a lot of study and research to make their shopping centres work. If shoppers are attracted to a mall, and stay longer as a result of an interesting mix, they spend more money and everyone benefits. Retailers do not mind paying higher rent if there is business to be done.'