King Wah Centre, on the corner of Shantung Street and Nathan Road, will not renew its contract with shop owners after May 31.
The shopping centre houses many fashion stores specialising in local designs and brands, and shops selling reasonably priced hair products and rare imported accessories featuring Japanese anime and Disney characters - all of which cater to young people.
Tenant Liu Man-yee, who has had a knitting store on the second floor for more than 30 years, said: "If the shopping centre is willing to renew the contract with me, I will continue my business, even though there's an 8 to 10 per cent rise in rent every year."
Liu pays about HK$50,000 per month to rent a space in King Wah Centre.
She said she will not move out of the area because of her loyalty to her regular customers. Her plan is to move to a storage room she owns in another area of Mong Kok, and continue to run her shop from there.
A construction worker who identified himself as Ah Pao said he loved shopping at King Wah Centre on the weekend, and always finds good bargains there.
"After King Wah closes, I will shop at Sino Plaza," he said.
A spokeswoman for King Wah Centre's management company said that only the shopping area on the bottom four floors will undergo reconstruction. Restaurants, which take up the fifth to 16th floors of the centre, will remain open.
It is not yet clear what will happen to the four-storey area. People involved in the planning of the redevelopment were too busy to give comments, the spokeswoman said.