• Large amount of supply to suppress China retail rent and price growth

    17 April 2015

    26 March 2015 (Hong Kong) – Knight Frank and Holdways have published the latest China Retail Property Market Watch report. To capture the opportunity of online sales, a number of major retailers established or expanded e-commerce business in China during the second half of 2014.

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    To compete with online shopping and attract footfall in shopping centres, many landlords have adjusted tenant mix and increased the proportion of food and beverage as well as entertainment facilities in their malls.

    The total stock of prime shopping centres in seven major Mainland cities grew 6.2% to reach 38.8 million sqm in the second half of 2014.  In the same period of time, the vacancy rate in Hangzhou’s prime shopping centres remained the lowest among China’s seven major cities, while the highest vacancy rate was recorded in Shenzhen.

    With abundant new retail supply in the pipeline and a slower economic growth target of 7% in 2015, David Ji, Director, Head of Research & Consultancy of Greater China at Knight Frank expects growth in retail property rents and prices to be suppressed in major Chinese cities this year. First-tier cities—which are now largely saturated as a result of rapid development in previous years—will witness slower take-up of retail space from major retailers, while fast-fashion brands and other mid-priced retailers are expected to continue entering and expanding in second-tier cities.

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