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over year, to $29 billion as of the end of Q1 2012. Supported by economic growth, the development of Beijing’s mid- to high-end shopping centre property market was largely stable during the first quarter of 2012. Despite a small uptick in the overall average vacancy rate, rents in most catchments continued to grow, and investment returns remained largely unchanged, the report said. CapitaMall Crystal had its grand opening during this quarter, adding a
CONTINUED GROWTH IN BEIJING’S RETAIL PROPERTY MARKET A
ccording to the Q1 2012 Colliers International report on Beijing’s Retail Property Market, Beijing’s retail sales expanded by 14.3% year
retail gross floor area of 72,000 sqm to the property market while the total stock of the overall mid- to high-end shopping centre property market amounted to 4.69 million sqm as of end Q1 2012, up 4.06% against last year, the report said. Demand for quality retail space from many international and domestic
retailers continued to grow in this quarter, bringing about an active leasing market. Some luxury brands were rather aggressive in renting space at high-end shopping centres. For example, Chloé and Loewe expanded their boutiques to 200 sqm and 250 sqm in Seasons Place, respectively. Fendi doubled its tenancy size to 400 sqm in China World Mall, while Marni also leased 120 sqm in the same complex. Dunhill committed 250 sqm at Parkview Green while Montblanc took up a whole block of a retail premise at the Village @ Sanlitun North zone to open its first concept store and its 101st Chinese store, spread over four storeys. In Q1 2012, watch makers and retailers were also anxious to expand in Beijing. For instance, Omega confirmed its in-door relocation, expanding to 180 sqm in Seasons Place. IWC signed for new spaces, taking up 300 sqm in Parkview Green and 100 sqm in Seasons Place, respectively, Colliers reports. Fast fashion retailers remained keen in opening new stores or expanding their presence in Beijing. Cases included Hollister’s lease of 1,200 sqm in Indigo after opening its first Beijing store at Galleria, and Evisu’s and H&M’s rental of 180 sqm in U-Town ll and 2,320 sqm in Indigo, respectively. Te
demand from F&B operators was still on the rise; Alfie’s Bar & Restaurant leased 285 sqm in Parkview Green, which was the fifth worldwide restaurant for the Dunhill Group. Golden Lake and the Red Been leased 680 sqm and 180 sqm in the Malls at Oriental Plaza, respectively. According to Colliers, the average ground floor fixed rent in Beijing’s mid-
to high-end shopping centres rose by 3.97% quarter on quarter, to $126.1 per sqm per month. Te Wangfujing, Financial Street and CBD catchments had the most significant growths of 13.37%, 8.33%, 6.97% quarter on quarter, respectively. Wangfujing continued to be the most expensive retail catchment in Beijing, with rents averaging at $267 per sqm per month as of end Q1 2012. By contrast, rents of the Jianguomen catchment declined considerably, by approximately 6.31% quarter on quarter, owing to the continued underperformance of some properties in the precinct. Colliers believes that increasing disposable income of local residents and further internationalisation of Beijing will ensure continuous strong consumption power in the capital. In addition to this, local consumers are expected to be more rational and selective in terms of purchase as they are poised to show more diversed tastes in fashion and quality of retail products. Whilst some traditional luxury brands reportedly experienced a slip in their sales during the first quarter, other luxury labels that recently entered the local market, such as Bottega Veneta, enjoyed fast growing sales turnovers with dual stores in the same centre. According to Colliers, this indicates a sustained demand from
more diversified retailers, as well as the needs that shopping centre management should change in line with the evolving consumer tastes in a bid to enhance the mall’s rental income. An increasingly wider range of brand mixes in the luxury retailing sector for the high-end shopping centres is inevitable over the next 12 months, although the overall scene of trade mixes for the majority of shopping centres in Beijing is expected to remain largely unchanged. In addition, Colliers International projects that demand from the home and lifestyle and F&B trades will continue to grow, underpinning rental level enhancement.
JUNE 2012 I CITYSCAPE I 11
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