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by Cheryl Tay
In about five to 10 years, China could surpass Western Europe in terms of shopping centre space, stirring fears of a property bubble as developers build more malls to cater to the fast-growing middle classe.
CBRE Group revealed that at least 20 million sq m of shopping centres were built in 14 major Chinese cities over the past 10 years, while an additional 14.8 million sq m is under construction.
In comparison, Western European centres cover 55 million sq m.
Neville Moss, Head of EMEA Retail Research at CBRE, said, “If China keeps building at this rate, and on the assumption there’s more shopping centre space outside the cities we cover, China will probably overtake Western Europe in five to 10 years.”
While China only began building malls 10 years back, Europe started building shopping malls as early as the 1960s. Developers in the country have built malls in recent years to take advantage of rising demand for international luxury retailers like Louis Vuitton and Burberry. Additionally, the retail sector became more attractive, following the government’s clampdowns on the overheating residential market.
Singapore-based CapitaMalls Asia will invest 2.3 billion yuan (S$460 million) to build its ninth shopping centre in Beijing (pictured), while Hong Kong-based Swire Properties and Sun Hung Kai Properties will build new centres in Chengdu, southwest China.
The race to build has led to a slew of large, generally vacant centres in less-developed areas. For instance, the New South China Mall, considered the world’s biggest at 660,000 sq m, is said to be mostly empty, seven years after its opening.
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