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Consumer Consumption, Retailer Expansions Boost Asia Pacific’s Retail Real Estate Market
22 Aug, 2011, China
BEIJING, Aug. 22, 2011 – Consumer consumption and the expansions of international and domestic retailers have boosted Asia Pacific’s retail real estate market in the first half of 2011, according to Cushman & Wakefield midyear Asia Pacific Retail MarketBeat Report.
Consumer sales figures for the first half of 2011 were exceptionally strong in Asia Pacific, particularly among the luxury goods sector. Growth in demand has fueled expansion plans for international and domestic retailers alike, with numerous brands – including Prada, who issued additional shares to boost its Hong Kong IPO – making use of the equity markets to fund their growth.
Food, fashion, consumer goods and luxury retailers sought out growth opportunities in Asia Pacific during the first half of the year. Leading Korea consumer goods retailer Lote Department has plans to open five Indonesian stores by 2018; Ford Motor Company will build 15 to 20 plants in Asia; Apple announced plans to build a third Shanghai store, in addition to dozens of others throughout China; Tommy Hilfiger – previously distributed in Asia Pacific only through a licensing agreement - is taking over the right to sell its own brand in China; and New York-based Magnolia Bakery received approval to sell franchises overseas.
Property owners also remain poised to benefit from the increase in consumer demand and retailer expansions. Rental rates have begun to increase for both main streets and shopping malls across the region. Hong Kong saw the most notable rental growth for premium retail streets, with rents in Causeway Bay up 5.0 percent from the previous quarter, rising to US$1,941.00 per square foot per year at midyear. Shopping mall rents in Beijing’s downtown Wangfujing district increased 100 percent from this time last year, reaching US$413.00 per square foot per year at midyear.
Improved fundamentals bolstered the retail investment market, with retail property sales totaling US$11.6 billion year-to-date, up 38 percent from the US$8.4 billion recorded at this time last year. If this pace is continued through the second half of the year, 2011 could be a notable year for retail acquisitions.
“Looking forward, there will be continued momentum for growth in Asia Pacific’s retail real estate sector,” said Sigrid Zialcita, Cushman & Wakefield’s Managing Director of Research in Asia Pacific. “While uncertainty in the U.S. and European markets could shake confidence locally, our regional economy remains on path to continue its growth.”
2Q 2011 HIGHEST ASKING RENTS – PRIME RETAIL (MAINSTREETS)
|
MARKET |
CITY |
COUNTRY |
ASKING RENT (USD PSF/Year) |
|
1. Causeway Bay |
Hong Kong |
China |
1941.00 |
|
2. Central |
Hong Kong |
China |
1618.00 |
|
3. Tsim Sha Tsui |
Hong Kong |
China |
1376.00 |
|
4. Ginza |
Tokyo |
Japan |
1049.00 |
|
5. Omotesando |
Tokyo |
Japan |
965.00 |
|
6. Mongkok |
Hong Kong |
China |
858.00 |
|
7. Shinjuku |
Tokyo |
Japan |
755.00 |
|
8. Myeongdong |
Seoul |
Korea |
631.00 |
|
9. Shibuya |
Tokyo |
Japan |
629.00 |
|
10. Gangnam St. |
Seoul |
Korea |
530.00 |
2Q 2011 HIGHEST ASKING RENTS – PRIME RETAIL (MALLS)
|
MARKET |
CITY |
COUNTRY |
ASKING RENT (USD PSF/Year) |
|
1. Wangfujing |
Beijing |
China |
413.00 |
|
2. Orchard Road |
Singapore |
Singapore |
375.12 |
|
3. East Nanjing Road |
Shanghai |
China |
347.00 |
|
4. Xidan |
Beijing |
China |
344.00 |
|
5. West Nanjing Road |
Shanghai |
China |
341.00 |
|
6. Lujiazui |
Shanghai |
China |
331.00 |
|
7. Xujiahui |
Shanghai |
China |
318.00 |
|
8. Middle Huaihai Road |
Shanghai |
China |
289.00 |
|
9. Suburban Areas |
Singapore |
Singapore |
278.16 |
|
10. CBD |
Beijing |
China |
250.00 |
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