Global retailers’ APAC strategy remain China-focused: Although domestic economic growth is slowing, global retailers surveyed by CBRE remain fairly bullish on the back of the rising incomes and purchasing power of Chinese consumers. Global retailers are also focusing on markets such as Vietnam, Indonesia, the Philippines and Thailand due to their relatively young populations and the increasing spending power of the emerging middle class.
Over half of retailers prefer shopping centres: Global retailers looking to enter or expand in emerging markets prefer to lease space in well-located and competitively-managed shopping centres. This is resulting in strong demand for space in malls regarded as the best. Shopping centre landlords are also improving the quality and variety of their offering into order to attract high profile tenants and increase foot traffic.
Slow but steady expansion: Most retailers look to add one to five new store in 2014. This slow-but-steady expansion reflects overall market activity witnessed so far this year; demand is steady but retailers in several markets are displaying a noticeably more cautious attitude towards expansion compared to the more aggressive approach witnessed in previous years. In addition, many global retailers are already well established in the region and are not expanding their footprint at such a rapid rate.
F&B retailers are the most ambitious: This sector continues to perform well on the back of the positive macro environment in Asia Pacific. Expansion is also being supported by shopping centre landlords’ focus on improving their F&B component to increase footfall in view of rising competition from other malls and the e-commerce sector.
Outlook: Retailer demand in Asia Pacific is expected to remain firm over the remainder of 2014 but expansion will be slower compared to the strong activity seen over the past two years. Many retailers are still expanding but in a more careful and considered way. The overall outlook is positive, however, and retailer sentiment and demand will remain steady.
|Henry Chin, Ph.D.
Head of Research, Asia Pacific
+852 2820 8160
Manager, Asia Pacific
+852 2820 6557
Retail Services, Australia
+61 2 9333 3396