THE tenants' revolt against paying exorbitant rent increases is spilling over into the retail sector. Shop operators are refusing to agree to landlords' demands for sharp rent rises and are instead moving to cheaper alternatives, according to a survey by property agents Richard Ellis. ''Tenant resistance to Hong Kong's high retail rents has become increasingly apparent during the second quarter,'' said Richard Ellis retail manager Sean Maxwell. ''There has been a growing trend for retail operators to relocate to alternative shopping districts or to poorer locations to reduce overheads.'' The move reflects a similar trend in the residential market, revealed by Sunday Money earlier this month. Rent increases of up to 50 per cent led to tenants refusing to renew their leases in luxury flats. According to the Richard Ellis survey, the most sought-after shops are being leased at between $1,700 and $1,800 per square foot. The monthly rental for a 150 sq ft of retail space at Hong Kong Mansion in Causeway Bay, the island's most exclusive shopping area, is about $280,000. This translates to a record high of $1,860 per sq ft. But locations in Tsim Sha Tsui, including Peking Road, are available for about $500 per sq ft, and are attracting growing interest from retailers. Likewise, some properties in Admiralty and Central are going for as little as $300 per sq ft. ''The underlying strong demand for well-located retail space is well illustrated by the rapid take-up by retail operators of the large shop area vacated by Matsuzakaya in Queensway [shopping arcade in Admiralty],'' said Mr Maxwell. ''Rising retail rents have been of great concern to both the smaller/local operators,'' he added. But the problem is not confined to small operators. Big department stores are also affected. Yaohan has been forced to give up 75 per cent of its premises in the New Town Plaza, Sha Tin, because the landlord, Sun Hung Kai Properties, put the rent up. Other big department stores are understood to be considering similar moves to cut their overheads in the fiercely competitive Hong Kong market. Higher rents have also led to a slowdown in sales activity, as landlords look for higher returns from leasing rather than selling property. In the few instances where property has come on to the market, demand has been strong. A ground floor unit in Lockhart Road was put up for sale at $37,000 per sq ft but the price rapidly rose to $45,000 after the strong response from potential buyers. However, the squeeze on rents is likely to be eased by the supply of an additional 611,000 sq ft on Hong Kong island by the end of the year. A further 1.6 million sq ft is expected to be completed in Kowloon and about 700,000 sq ft in the New Territories.