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Gucci-Crazy Chinese Fuel Soaring Shop Rents in Hong Kong

Soundwill Holdings Ltd. was forced to sell many of its properties as it battled to survive Hong Kong’s real estate crash in the late 1990s. Even after its stock plunged 99 percent and debt obligations loomed, it held on to a 40-story tower on a tucked-away street that today is the second-most expensive retail strip in the world.

Russell Street in the Causeway Bay district trails only New York’s Fifth Avenue in terms of average retail rents, fueled by mainland Chinese shoppers seeking tax-free Gucci handbags and Rolex watches. Shares of Soundwill are up more than sixfold since the beginning of 2009, the most among the 50 biggest developers listed in Hong Kong.