According to the latest Greater China Property Market Report released by Knight Frank, during the third quarter, Beijing’s average retail rent remained stable, while the vacancy rate slightly dropped. In Shanghai, the vacancy rate of prime shopping malls showed little change. Due to notable amount of new supply, the occupancy rate slightly dipped to 91.2%.
Beijing
With economic growth in Mainland China slowing, consumption growth in Beijing has also slowed. Meanwhile, following the Central Government’s new policy “to curb corruption and luxury spending”, luxury retailers have been more prudent about their expansion plans in Mainland China. With continuing urbanisation in China and the government’s efforts to promote domestic demand, Thomas Lam, Director and Head of Research & Consultancy, Greater China, at Knight Frank expects retail rents to grow steadily.
Shanghai
Boosted by a number of newly launched malls and the peak travel season, which included the summer and Mid-Autumn Festival holidays, both tourism spending and local consumption remained robust during the third quarter. The market is expected to quieten with no new shopping malls in the city’s major retail areas bar Shanghai Times Square in Luwan, where Lane Crawford will soft-open its China flagship, after experiencing a surge in supply in Q3. Retail rents are set to remain stable and the vacancy rate is expected to see a slight rise in Q4.
Guangzhou
In the first three quarters of 2013, signs of stabilisation in the economy have revived the retail market and impacted positively on the retail property market. Guangzhou’s leasing market faces a number of uncertainties, arising from the emergence of multiple retail areas, an increase of new supply and the continuing growth of online shopping. Thomas Lam forecasts occupancy rates may drop and rents may plateau or even decline in the near future.