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Analysts believe tourists from mainland China will heavily influence the 2019 prospects of Asia’s retail property market, including that of Singapore, reported the South China Morning Post.
They said the spending behaviour of this group will determine the direction of retail property prices across major shopping destinations in the region next year.
According to M&G Real Estate’s head of property research for Asia, Jonathan Hsu, as long as Chinese mainlanders continue to seek new shopping and leisure destinations in Asia Pacific, the outlook for the region’s retail property market would be promising.
In particular, he is upbeat on prime retail properties in Japan, South Korea, Australia and Singapore.
“A lot of them (Chinese mainlanders) are starting to venture into places like South Korea, Japan, Australia and Singapore. I won’t say they’re bored of Hong Kong, but there’s more desire to experience new countries, different cultures so that’s likely to continue and that’s part of the reason why we’re quite positive on prime retail streets.”
“If you walk around Orchard Road (in Singapore), you do see a lot of (mainland) Chinese shopping. So the spillover effect is likely to continue because the spending power is there,” noted Hsu, adding that Chinese mainlanders are visiting new places in Asia on a more frequent basis.
M&G Real Estate Asia had previously embarked on an acquisition spree of shopping malls in Asia two years ago. These include Prato Nakasu at Fukuoka in Japan, the Upsquare Mall in South Korea’s Ulsan City, Melbourne’s Casey Central and Compass One in Singapore.
Moreover, Hsu thinks that mainland Chinese will still spend a lot on shopping despite Beijing’s restrictions on capital outflows.
“If you’re buying small items, like retail shopping, there’s less scrutiny. The control is really on the big outflows,” he explained.
Overall, Hsu expects Asia Pacific’s retail property market to grow by 1.0 to 2.0 percent for the whole 2019.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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