Retail in Asia


The food flex: F&B fuels leasing momentum for commercial real estate

The ever-growing significance of F&B in shopping destinations throughout the region is undeniable – and mall operators across Asia are becoming well aware of food’s unrivalled potential to captivate a broader consumer base, drive foot traffic, and compel customers to linger.

SEE ALSO: From grape to glass: Asia’s spirited embrace of natural wine

Retailers and mall operators can capitalise on this shift in behaviour by implementing strategies that offer a seamless integration of food, entertainment, and retail. 

Real estate performance

French luxury fashion house Maison Margiela opened a cafe-retail destination at IFS International Finance Center in Changsha in August. Source: Maison Margiela

In mainland China, the growth of F&B consumption has outpaced other retail sectors. According to JLL’s Q2 review of China’s property market, Shanghai saw F&B lead recovery for commercial real estate. “In addition to continued expansion by F&B tenants, this quarter we also observed fashion and lifestyle retailers regaining confidence,” said Neo Huang, head of retail agency leasing for JLL East China.

Singapore saw a similar trend, with majority of store openings in Singapore being driven by new and existing F&B brands. 

Even in less tourist-driven destinations such as Seoul, South Korea, F&B and fashion retailers are especially active in targeting domestic consumers, says CBRE. And as Seoul’s retail market zeroes into high-end and cost-effective consumption, F&B retailers are elevating the size and positioning of their stores. 

Placemaking strategy

Hongkong Land, owner of Hong Kong commercial complex Landmark, and F&B operator Leading Nation Hospitality, have debuted Forty-Five, a multi-concept F&B destination atop Landmark. Tenants include a new rooftop bar and restaurant, Cardinal Point. Source: Cardinal Point

In Hong Kong, the F&B sector witnessed a notable increase in its real estate share. JLL’s High Street Shops Vacancy and Trade Mix survey also observes a major trend among Hong Kong landlords: the adoption of a “community ecosystem” strategy. 

Rather than focusing solely on individual shopping centres, landlords today are dedicated to cultivating appealing neighbourhoods. Recognising the integral part that dining out plays in the lives of many residents, F&B offerings serve as an effective means for landlords to enhance the community experience and attract increased foot traffic to their premises. Prominent examples of this approach can be seen in the Lee Garden complex by Hysan Group in Causeway Bay, the Starstreet Precinct and Taikoo Place by Swire Properties, and the Central portfolio by Hongkong Land.

In the first half of 2023, Hongkong Land, together with F&B operator Leading Nation Hospitality, launched a multi-storey, 20,000-square-foot destination atop the luxury Landmark shopping centre. Named Forty-Five, the new addition features five different F&B concepts and was described by Hongkong Land executive director Alvin Kong as “the perfect complement to our mission of building lasting value in the heart of cities powering Asia’s growth.”

Fresh arrivals

Van Leeuwen’s first overseas store opened in Singapore’s Orchard Central in August. Source: Van Leeuwen

More accessible than luxury goods, food and beverage offer a premium experience at a lower cost. A WGSN report identifies ‘the food flex’ as an emerging behaviour for Generation Z consumers, indicating a rising post-pandemic appetite for in-real-life or IRL exclusive dining experiences despite the recession.

Singapore has been the location of choice for a number of Asian F&B debuts. American ice cream retailer Van Leeuwen, which has 50 stores across the US, opened its first brick-and-mortar point of sale in Asia on Orchard Road in August, while Hong Kong-founded burger chain Honbo opened its first overseas branch in Singapore in July. Singapore’s Marina Bay Sands, too, sees increased demand in new F&B concepts.

In Macau, the 100,000-square-metre Galaxy Promenade hopes to become the city’s premier retail destination, with luxury flagship stores and lifestyle boutiques – but its extensive 120 dining options, which include Michelin-starred restaurants and authentic Chinese fare, are also expected to generate traffic. 

Asia’s liquid love affair 

Moroccan brand Bacha Coffee is eyeing expansion in the Greater Bay Area, opening its first store in Hong Kong’s IFC mall in August. Another new restaurant in IFC is Falcone, by Black Sheep Restaurants. Source: Bacha Coffee; Black Sheep Restaurants

It’s not just restaurants – the beverage sector is also pulling its weight, with coffee and tea brands on a speedy ascent all over Asia. From more budget-friendly Chinese chains such as Luckin Coffee, which is seen as Starbucks’ leading rival in China, to craft alternatives, beverage brands are fast taking over commercial spaces. 

Finnish lifestyle brand Marimekko plans to unveil its first boutique and cafe in Singapore’s Ion Orchard mall this September. Source: Marimekko

With an eye on further expansion into the Greater Bay Area (GBA), Moroccan cafe chain and retailer Bacha Coffee plans to make its presence felt in early 2024 starting with an inaugural store in Hong Kong’s IFC Mall. At Marina Bay Sands, F&B offerings include % Arabica from Japan, PS Cafe, and the first Ralph’s Coffee outpost in Singapore, while lifestyle brand Marimekko is also set to introduce its first cafe concept in the Lion City.