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Despite some gloomy predictions of a slowing growth in Asian retail markets, an analysis of the basics of the underlying demographic shifts and consumer behaviour at work in Asia indicate that it is the world’s most energetic and exciting market, according to Colliers International.
According to the Economist Intelligence Unit, the region’s retail sales is expected to increase by 4.8 percent in 2016, surpassing the global average of 3.2 percent.
While there may be valid concerns about the long-term sustainability of some of China’s more ambitious developments, the overall outlook for the region is broadly optimistic. Notably, investors in existing assets are advised to look at cycles in mature markets and utilise the softening rents as a chance to be imaginative on remixing and repositioning assets.
“In addition, where we are forecasting vacancies in developments, we see (a) significant appetite for owners to diversify,” said Colliers International.
This is because these owners are in “prime position to occupy their developments with made-to-suit retail concepts” that could either be domestically grown concepts or portfolios of brands acquired overseas.
Meanwhile, market fundamentals indicate that China can build on the same kind of trends at play in Hong Kong, Japan and Singapore – where landlords are creating more “experiential retail”, built around wellness and lifestyle, as well as a broader range of dining options.
“Indeed, global mid-market F&B superbrands and Asia-specific F&B superbrands are for the most part underrepresented in China,” it said.
“For this very reason, we believe there is significant opportunity for mid-market aspirational global F&B players to increase their Asian portfolios. We expect their activity to increase in 2016.”
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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