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Global retailers push up prime retail rents in Shanghai
By Cherry Cao |
January 16, 2013, Wednesday
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PRIME retail rents in Shanghai will continue to rise moderately in 2013 despite abundant supply as demand from global retailers remains strong, real estate service providers predicted.
"Supply is back towards mature locations over the next 12 months," said James Macdonald, head of research with Savills China. "However, we still expect prime retail rents to rise between 3 and 5 percent year-on-year in 2013 with new entrants being the main demand driver despite more conservative growth by incumbent retailers."
Six prime-location retail projects, including Sun Hung Kai Properties' International APM on Huaihai Road, Jing An Kerry Center on Nanjing Road, and L'Avenue in Hongqiao, are scheduled to open this year, adding 400,000 square meters of premium retail space to the city's current stock, according to CB Richard Ellis.
"We remain upbeat about the city's prime retail market performance in the new year as sluggish economic growth in Europe and the US will spur more global retailers to establish presence in Shanghai," said Sam Xie, director of CBRE Research, who also anticipated a single-digit rental growth by the year end. "Consumers have become more sophisticated and individualistic, bringing opportunities for new kind of retailers such as designer brands."
Prospects for retail growth in emerging markets like China remained rosy, Deloitte Touche Tohmatsu Ltd said in a report today.
Revenues of the world's 250 largest retailers rose 5 percent in the fiscal year of 2011-2012 despite a global economic downturn. Companies based in emerging markets grew the most, according to the 2013 Global Powers of Retailing report.
Fuelled by a burgeoning middle class, a youthful population and sizeable foreign direct investment, almost half of the 50 fastest-growing companies were in the emerging markets during the 2006-2011 period, Deloitte said.
"Supply is back towards mature locations over the next 12 months," said James Macdonald, head of research with Savills China. "However, we still expect prime retail rents to rise between 3 and 5 percent year-on-year in 2013 with new entrants being the main demand driver despite more conservative growth by incumbent retailers."
Six prime-location retail projects, including Sun Hung Kai Properties' International APM on Huaihai Road, Jing An Kerry Center on Nanjing Road, and L'Avenue in Hongqiao, are scheduled to open this year, adding 400,000 square meters of premium retail space to the city's current stock, according to CB Richard Ellis.
"We remain upbeat about the city's prime retail market performance in the new year as sluggish economic growth in Europe and the US will spur more global retailers to establish presence in Shanghai," said Sam Xie, director of CBRE Research, who also anticipated a single-digit rental growth by the year end. "Consumers have become more sophisticated and individualistic, bringing opportunities for new kind of retailers such as designer brands."
Prospects for retail growth in emerging markets like China remained rosy, Deloitte Touche Tohmatsu Ltd said in a report today.
Revenues of the world's 250 largest retailers rose 5 percent in the fiscal year of 2011-2012 despite a global economic downturn. Companies based in emerging markets grew the most, according to the 2013 Global Powers of Retailing report.
Fuelled by a burgeoning middle class, a youthful population and sizeable foreign direct investment, almost half of the 50 fastest-growing companies were in the emerging markets during the 2006-2011 period, Deloitte said.
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