Knight Frank and Holdways have published the latest China Retail Property Market Watch report. Robust growth in domestic consumption and the government's continued efforts to boost domestic demand contributed to a double-digit annual increase in retail sales. Not only did the relatively optimistic landscape in the retail property market encourage foreign retailers to continue expanding, but it also attracted new brands to the market.
In the second half of 2012, the Chinese government insisted that it would “stand firm on property controls” and would not be relaxing its restrictions on the residential property sector in the near future. In an attempt to avoid policy risks and tap China’s strong purchasing power, developers continued to provide the market with quality retail properties.
Meanwhile, domestic demand is set to be further boosted by the gradual economic recovery and accelerated urbanisation of China. Thomas Lam, Director and Head of Research, Greater China at Knight Frank, says, “An abundant supply of quality retail properties is anticipated in major cities, involving mainly large commercial complexes. Rents of high-end shopping malls are projected to rise steadily, but at slower rates than in 2012, as pressure from increasing supply will lead to marginally higher vacancy rates.”