January 20, 2015, Beijing – Cushman & Wakefield, the world’s largest privately-held commercial real estate services firm, has published the Beijing Retail MarketBeat report for Q4 2014. According to the report, retail sales in Beijing reached RMB 738.91 billion during the period from January to October, up by 8.7% year-on-year. This growth figure represents an improvement over last year. During the same period, per capita disposable income in the city grew by 9.5% to reach RMB 36,363. The consumer price index (CPI) experienced a steady decline over the year to 101.8.
Kevin Huang, Director of China Consulting, Beijing, Cushman & Wakefield said: “The fourth quarter saw a steady increase of prime retail net asking rents in core submarkets. Emerging submarkets also performed impressively this quarter.” Tongzhou Wanda Plaza in Tongzhou District, for example, received 400,000 customers on its opening day, November 29, highlighting the enormous commercial potential in such emerging localities. The widely-anticipated launch of shopping mall Beijing Longhu Changying Tianjie is scheduled for the end of 2014. As popular new shopping malls enter the fray, the traditional department store format continues to struggle. On December 1, department store ITO Yokado closed its branch outlet in the Xizhimen submarket, its third store closure in Beijing this year.
Some retailers have adopted an omni-channel strategy, setting up integrated service platforms with online and offline channels to support sales performance. In November, Beijing Wangfujing Department Store announced the launch of its omni-channel strategy involving the physical store, the store’s website (PC-based and mobile), and third-party platforms including messaging service WeChat and B2C website Tmall.com. Also in the Wangfujing submarket, SPOT, a shopping center branding itself as the physical store for Taobao retailers, is planned to open at the end of 2014. Billy Lo, General Manager, Beijing Office, Cushman & Wakefield said: “As customers increasingly shop online, this type of integrated approach to digital channels is expected to see further evolution and gradual acceptance by retailers, helping drive sales.”
Approximately 366,000 square meters of new high-quality retail supply is expected to enter the market in 2015. The scheduled launch of two adjacent high-end projects in 2015, Yingke Center and Tongying Center, will likely put pressure on landlords, posing challenges in terms of leasing and operations. The upscale shopping center WF Central is scheduled to open in 2015 as well, enhancing the overall retail portfolio in the Wangfujing submarket. Due to relatively limited projected future supply, we expect that rental rates for high-quality retail accommodation in core submarkets will steadily increase.
About Cushman & Wakefield
Cushman & Wakefield is the world’s largest privately‐held commercial real estate services firm. The company advises and represents clients on all aspects of property occupancy and investment, and has established a preeminent position in the world’s major markets, as evidenced by its frequent involvement in many of the most significant property leases, sales and management assignments. Founded in 1917, it has approximately 250 offices in 60 countries, employing more than 16,000 professionals. It offers a complete range of services for all property types, including leasing, sales and acquisitions, equity, debt and structured finance, corporate finance and investment banking, corporate services, property management, facilities management, project management, risk management, consulting and appraisal. A recognized leader in local and global real estate research, the firm publishes its market information and studies online at www.cushmanwakefield.com/knowledge.