Retail in Asia

In Markets

Asia, Latin America driving global shopping center revival

Asia and Latin America’s economic resurgences have fueled an upturn in retail activity, with increasing rents reflecting high demand for the limited amount of prime retail opportunities in both regions, according to a new global retail report from Cushman & Wakefield and the International Council of Shopping Centers (ICSC).

The report, A Global Perspective on the Shopping Center Industry, was released at the 2012 ICSC Retail Real Estate World Summit in Shanghai recently.

The report noted that Asia-Pacific leads the three world regions in terms of rental growth for shopping centres, with rental rates increased 2.8 percent over the past year.

The region’s booming consumer class, new economic policies supporting retail and growing international scope have promoted the region’s strong performance, and will support future expansion.

With rental rates of over USD927 per square foot for its prime shopping centers, Hong Kong’s high volume of mainland tourists and dearth of prime shopping center space has made it home to the world’s highest retail rates.

Meanwhile, rents in Shanghai and Beijing, which are popular entry points for international retailers, have climbed to USD404 per square foot and USD368 per square foot, respectively.

Asia-Pacific’s promising retail future has led to significant new development, with 300 million square feet of retail projects in the first half of 2012. While some cities are at risk of overbuilding, positive long-term economic and demographic conditions will provide a strong platform for growth and absorption of new shopping centers across the region.

The report likewise noted changes in consumer preferences, spending patterns and technological advances have impacted owners and retailers across the globe.

However, despite rapid changes in technology and how consumers shop and interact with brands, the physical shopping center is still at the heart of a consumer’s retail ‘experience, according to Glenn Rufrano, President and Chief Executive Officer of Cushman & Wakefield.

Store owners were also found to be tailoring their tenant mix for different segments of shoppers, adding a higher concentration of luxury retailers in areas with pockets of wealth and high volumes of international tourists, and providing a stronger international mix of retailers to meet consumer demand.

(Source: Cushman & Wakefield)