A growing middle class and increasing spending power across the Asia has led to consumer demand for better quality retail, fuelling the growth of new shopping centres. And according to international agent CBRE’s Global ViewPoint, emerging markets will continue to dominate new development in 2013-2015. “We have started to see, certainly over the last year or more, an increase in investment in the retail market, particularly in core countries like Singapore and the larger metropolitan areas,” says Petra Blazkova, CBRE’s headof research for South East Asia.
When it comes to retail demand, CBRE research shows that Asia accounted for 24% of global new entries. Hong Kong is a key market, seeing strong demand from both international and domestic retailers. It was by far the most sought-after city last year, with 51 new retail entries, principally from the UK and France, but also from the US, Japan and South Korea.
Demand is largely driven by the high number of tourists, particularly from mainland China, and because it is seen as a launch pad for entering the wider region. “The last three years have been record-breaking in terms of tourist numbers, which have risen by 15% to 52 million a year,” says Tom Gaffney, national director and head of retail, Hong Kong, at Jones Lang LaSalle. “That, combined with a population of eight millionis really pushing up spend.” Two to three years ago, Gaffney says developers were targeting the Tsim Sha Tsui area in southern Kowloon. Now, however, the focus has moved to Causeway Bay and the New Territories near the boarder, with Sheung Shui, Tuen Mun and Sha Tin doing “tremendously well”.
But unlike such city such as Bangkok, Hanoi and Kuala Lumpur, Hong Kong’s lack of space is stilting development, pushing retail rents up to unprecedented levels and forcing some retailers to move to, or continue to expand in, de-centralised areas. Meanwhile, Singapore welcomed the world’s fourth highest number of new retailers last year, with 25 entering the market. The island state’s limited supply pipeline means that primary space is snapped up quickly. The newly opened Jem shopping mall in Jurong East opened with full occupancy and the Orchard Gateway scheme, set to open in November, is already 80% pre-committed.
Read more on page 61 of the MAPIC 2013 Preview
The MAPIC Preview is the Official MAPIC Magazine