A Overview of 30 Retail Locations in China

An Overview of 30 Retail Locations in China

China City Profiles2014

2 China City Profiles 2014

Retail sales in 2013

Disposable income in 2013

0 100 200 300 400 500 600 700 800 900 1,000

Zhuhai Xiamen

Hefei Changzhou

Kunming Nantong

Changchun Foshan Dalian

Xi'an Zhengzhou

Ji'nan Ningbo Fuzhou Harbin

Wuxi Changsha

Qingdao Shenyang

Nanjing Hangzhou

Suzhou Chengdu

Wuhan Shenzhen

Tianjin Chongqing

Guangzhou Shanghai

Beijing

(RMB billion)

8.7% 8.2% 15.2% 11.9% 14.0% 10.6% 13.0% 13.1% 11.5% 19.9% 13.8% 13.7% 13.3% 14.1% 12.9% 13.9% 18.7% 13.2% 13.4% 12.9% 14.0%

12.1% 13.6%

13.3% 12.8% 14.0% 13.7% 14.5% 10.5% 13.4%

Y-o-y Growth (%)

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Harbin Chongqing Changchun Zhengzhou

Hefei Kunming

Shenyang Wuhan

Chengdu Dalian

Nantong Fuzhou Tianjin

Xi'an Changsha

Qingdao Ji'nan

Zhuhai Changzhou

Foshan Wuxi

Hangzhou Nanjing Beijing

Suzhou Xiamen Ningbo

Guangzhou Shanghai Shenzhen

(RMB per annum)

9.6% 9.1% 10.5% 10.1% 10.1% 9.5% 10.6% 9.8% 4.8% 9.4% 10.0% 10.0% 10.3% 9.5% 9.6% 11.1% 10.4% 10.2% 9.7% 9.8% 9.8%

10.2% 10.2%

9.6% 10.3% 10.4% 5.2% 12.8% 9.8% 12.0%

Y-o-y Growth (%)

Source: CEIC

Source: CEIC

3An Overview of 30 Retail Locations

The China market presents a compelling opportunity for retailers. China’s retail sector has long been firmly underpinned by solid demand fundamentals – massive population, rapid urbanization and an emerging consumer class. China’s economic growth model is undergoing a shift from investment-led growth to consumption-led growth. Supported by massive accumulated household savings and low household debt levels, China’s domestic consumption offers immense headroom for growth. In this report, we profile 30 major cities in China and the defining characteristics of key submarkets within them. This allows readers to see, for example, which area has traditional department stores, which area has a pedestrian street, and which areas are quickly emerging as the next retail hotspots. The profiles also show which areas are mature and which are still emerging. Equipped with this information, readers will be able to readily identify areas that are frequently discussed by local consumers in each city and serve as a starting point for a retail store rollout plan. It is our hope that this guide will provide a useful reference when talking about cities in China.

China Retail Profiles 2014

Steven McCord Local Director Head of Research, North China Lead Analyst for China Retail Research [email protected] Tang Head of Retail, Shanghai and Eastern China [email protected]

Xi'an

ChengduChongqing

Beijing

Shenyang

Tianjin

WuhanShanghai

Qingdao

GuangzhouShenzhen

Dalian

Harbin

Jinan

Zhuhai

Changsha

Hangzhou Ningbo

Nanjing Suzhou

Foshan

Changchun

Zhengzhou

Hefei

ChangzhouWuxi

Xiamen

Fuzhou

Kunming

Nantong

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Contents

BeijingChangchunChangshaChangzhouChengduChongqingDalianFoshanFuzhouGuangzhouHangzhouHarbinHefeiJinanKunming

38404244465052545658606264666870

61012141618202224262830323436

NanjingNantongNingboQingdaoShanghaiShenyangShenzhenSuzhouTianjinWuhanWuxiXiamenXi’anZhengzhouZhuhaiGlossary of Terms


The political pulse of the nation and the cultural capital of China, Beijing also lays claim to a well-developed retail market that has undergone a decade of rapid expansion and given rise to numerous new submarkets throughout the city. Critical to the China expansion strategies of most international luxury brands, Beijing boasts mainland China’s number one luxury market – a standing that it is dedicated to keeping. With one of the most sophisticated core retail markets on the mainland, the Chinese capital also gains from its popularity as a tourism destination, annually welcoming more visitors than any other city in the country. Beijing also enjoys the title of China’s top retail spender, an accomplishment achieved by raking in more than RMB 837 billion in retail sales in 2013. Although Beijing’s spending power is backed by a strong presence of state-owned enterprise headquarters, the city’s predisposition for luxury items has softened in the wake of the country’s nationwide anti-corruption campaigns. The central government is aiming to curtail traditional gift-giving practices. However, demand from the growing middle-class, powered by a surging set of diversified industries, including IT and automotive, is expected to rise and drive retail demand growth in Beijing.

Centralised Areas: Central Business District (CBD) submarket: With convenient access to Metro Lines 1 and 10, this area has a strong concentration of high-end malls offering a plethora of top-tier international luxury brands, the most well-known of which is the sprawling China World complex. Nearby Shin Kong Place consistently tops the city’s ranking of total sales revenues. The CBD has a heavy concentration of international companies that employ a huge white-collar workforce.Third Embassy Area submarket: As a newer urban retail area in the upmarket eastern part of Beijing, Third Embassy is characterised by trendiness and lifestyle. It attracts mid-to-upper class shoppers who have an international flair in their tastes for shopping, dining, and brand preferences. Taikoo Li and Solana have become particularly popular with families as they feature outdoor shopping and dining areas. Taikoo Li is established as one of the top shopping centres in the city, enjoying high foot traffic and conversion rates. Third Embassy Area enjoys convenient access to the Third Ring Road, a key artery through east Beijing.West Chang’an Avenue submarket: This submarket benefits from a large population base and an older, stable population. Local residents here are still accustomed to the dominant department store format, although the presence of shopping malls has become more obvious in the past five years. The 2012 additions of Capita Crystal and Charter Shopping Centre, Beijing’s largest department store, have helped lift the submarket’s positioning from a strictly mid-range market to an upper mid-range to high-end market.

Beijing

Taikoo Li South (opened in 2008)

City Overview


Wangfujing submarket: Located just east of the iconic Forbidden City, the most traditional and well-established retail precinct in Beijing features an 800-metre pedestrian street lined with mid-range and high-end shopping malls as well as department stores. It is a quintessential “bright lights, big city” shopping experience. With as many as 1 million visitors per day on major national holidays, about two-thirds of the visitors to Wangfujing are tourists and one-third local residents. The area features a range of shopping formats, ranging from small street-side shops selling traditional Chinese goods and snacks to well-established department stores and shopping centres housing a wide variety of international brands. Apple and Forever 21 are among the more recent flagship stores that have opened here, leading the charge for many properties to upgrade. Key landmarks include Beijing APM and Oriental Plaza, with the latter’s expansive one-stop-shop complex considered among the highest revenue-earning malls in the city. Xidan submarket: Popular among students and young people on the lookout for a bargain, this submarket presents a shopping street that is easily accessible from Metro Lines 1 and 4. Xidan is dominated by a cluster of high-traffic department stores targeting middle-class teenagers and young adult shoppers from across the entire city. Xidan Joy City is regarded as the busiest shopping mall in the whole city, with several stores in the complex reporting record high sales for China. Most young visitors to Xidan come to the area with the intention of at least stopping at Joy City. The French department store Galeries Lafayette’s opening in 2013 represented a significant shift in direction for the submarket by providing a more upscale experience for the younger, moneyed generation of consumers who are interested in trendy international fashion. Seasons Place is the area’s high-end shopping mall, located a few minutes’ drive to the west in the Finance Street office area.

Xidan Joy City (opened in 2008)


East Second Ring Road submarket: Eponymously named after its location, the central submarket has the advantage of serving as a major transportation hub, where the Dongzhimen Bus Station, the Airport Express and Metro Line 2 meet, opening the retail precinct to a wide geographic reach. It is also adjacent to the city’s largest concentration of state-owned enterprise headquarters, which line the Second Ring Road and employ tens of thousands of office workers. Dominated by F&B and entertainment tenants, the East Second Ring is characterised by Raffles City and Ginza Mall.Zhongguancun submarket: Considered “China’s Silicon Valley”, this area has developed into a noteworthy retail submarket in recent years, serving demand created by nearby employees of surrounding high-tech powerhouses like Lenovo, Tencent, Microsoft, and Sohu. Connected via Metro Lines 4 and 10, the submarket is especially popular among tech-savvy and entrepreneurial crowds as well as the huge student population from Beijing’s largest cluster of universities, including the prestigious Tsinghua University and Peking University. The Gate shopping centre and EC Mall form a mid-market retail cluster here to draw regular student crowds, while Golden Resources New Yansha Mall is the largest shopping mall in Beijing and a popular destination for residents in western Haidian district.

Decentralised and Suburban Areas: Decentralised submarkets: Within the Fifth Ring Road, but beyond the core submarkets, the city’s decentralised retail areas have developed in tandem with the rising population along key metro line corridors. These areas have experienced a rapid pace of residential development. Newly-wed couples and young families often choose to buy homes, in

areas more affordable than the city centre yet more convenient than the suburbs. The population growth has led decentralised malls to adopt a very strong family orientation for middle class families seeking places to go on weekends, and fuelling a strong emphasis on kids-oriented clothing stores and children’s entertainment. These areas capture heavy footfall on weekends from local residents who take day trips with the entire family. Chaoyang Joy City and Indigo are good examples and are also known for having ample F&B and entertainment options. Suburban submarkets: Out past the Fifth Ring Road in Changping, Tongzhou and Shunyi districts, these newer and emerging areas on the very edges of town are seeing population growth as decentralised areas have matured and become too costly, and as the city’s business parks and development zones have taken off as centres of employment. Retail in these areas usually consists of stand-alone large-scale shopping centres rather than traditional pedestrian-oriented clusters. Though a few subway connections exist, most suburban projects have been developed with ample parking spaces, as most shoppers strongly prefer to drive to where they shop. Living Mall and Jinyu Vanke Square have done well to capitalise on the rising population and relative scarcity of other F&B and entertainment options compared to more mature areas. The suburban areas are also known for outlet malls, which are generally required to be a considerable distance from their full-price counterparts. The newest example, Fangshan Outlets, opened in 2013. A supply boom in super-regional malls is also gathering steam as Beijing’s population spreads further outward and residents demand better options closer to their homes. Inter-Ikea, Wanda Plaza, Paradise Walk, and Jingtong Roosevelt will mark the beginning of a new supply wave for the suburbs.

Oriental Plaza (opened in 2000)

Shin Kong Place (opened in 2007)

The Place (opened in 2006)

Chaoyang Joy City (opened in 2010)

Centralised Areas


Key Indicators Beijing China 30 Ranking

Urban Population (mln) 19,041 2

GDP per capita (RMB) 91,791 11

No. of Shopping Malls (2013) 50 3


Retail Stock per Consumer* (sqm) 0.6 19*Urban shopping centre floor space per consumer Sources: National Bureau of Statistics, Economist Intelligence Unit, JLL Research

Submarket Mass Market Mid-range High-end

Central Business District

Wangfujing

Third Embassy Area

Xidan

West Chang’an Avenue

Zhongguancun

East Second Ring Road

Decentralised

Suburban

Source: JLL Research

Market Outlook: Given that space for retail development in the city centre remains tight, much of Beijing’s future supply will be situated in the city’s outlying commuter areas. The greater housing affordability in outer areas is triggering demand for high quality shopping destinations for families, destinations that can be reached by car without the headache of traveling through the congested central parts of Beijing. Fast fashion and food and beverage are expected to do well in areas such as Changping and Fengtai, where most residents remain price-sensitive, yet are supported by rising earnings and disposable incomes. In the core areas, performance will further diverge between the top players and the rest. Properties with low foot traffic will be forced to consider stronger asset management, effective differentiation in the market, and building upgrades through renovation work. The consumer class will rise significantly from 43 per cent of Beijing’s population in 2013 to see another some 5.5 million shoppers added to the mix by 2020. Beijing is certain to remain a strategic location for international brands’ entry into China and expansion within the market, especially considering that store rents are often lower than those in expensive Shanghai and much, much pricier Hong Kong.


The capital and largest city of Jilin province, Changchun has significant potential as a retail market. Steadily progressing in tandem with the improving economic conditions around it, the city is advancing as a major automobile manufacturing centre and is home to joint ventures with Audi, Volkswagen, and Toyota. Due to the added employment opportunities in the city’s advancing secondary industries and tertiary industries, people’s livelihoods have improved in recent years, giving them more income to freely spend. The majority of retail opportunities lie in Changchun’s mass and mid-range markets. Though the luxury market is set to prosper, its growth will come at a slower pace. As the city’s retail scene receives a facelift and sees more shopping malls injected into its department store-dominated supply, a greater emphasis on fast fashion and affordable F&B is expected to go over well in the market.

Chongqing Road submarket: This submarket boasts the busiest retail area in the city, with locals and tourists creating the heaviest footfall here. With the city’s main business district helping to drive foot traffic, the area is also home to the city’s only high-end mall, Charter Shopping Mall, which attracts affluent locals and moneyed residents from nearby cities. The upmarket project is clustered with Wanda Plaza and Changchun Evergreen Department Store, which together generate the area’s biggest crowds. The latter caters to the mid-range market and has adjusted its tenant mix in recent years to stay ahead; it was one of the first retail projects to introduce Starbucks to the local market and also has an H&M. The submarket also holds several stand-alone projects and street-side retail shops, which draw frequent customers. This highly developed pocket of the city will not receive any new supply over the medium-term as it has limited available land.Hongqi Road submarket: This submarket’s eponymously named high street is a fashion-forward area that caters to the tech-savvy crowd. With mostly department stores positioned at the mass market and mid-range level, students, tourists and low to middle-income residents are the target shoppers here. Built in several phases since entering the submarket in 1993, Eurasia Commercial Capital Department Store is the landmark project here and also nationally – it often ranks within the country’s top 10

retail performers. In another corner of the submarket, Eurasia Shopping Mall is the only retail project in the city to carry all of the Inditex brands. The city’s second Wanda Plaza, which opened in 2010, is also in this submarket. PCD Stores has also carved out a portion of the market here, with local residents having formed the habit of shopping at the mid-range department store. The next phase of the Eurasia Commercial Capital Department Store by Eurasia International is the sub-market’s most-anticipated future project.Railway Station submarket: The submarket’s main projects are its centralised wholesale mass markets as well as the city’s newest and third Wanda Plaza. Opened towards end-2013, Wanda is working to generate footfall as the project is located outside of the main commercial area. In the thick of the commercial bustle at the centre of the submarket, however, Changchun Mall does well to draw foot traffic and attract shoppers.Guilin Road submarket: With few shopping centres or department stores, the submarket is filled with several street-side shops offering trendy fashion apparel targeted at the mass and mid-range markets; it also has plenty of F&B options. The lack of many large retail projects adds to the appeal of the area’s outdoor street-shopping environment, which is especially popular among students and young adults.

Changchun

PCD Stores (opened in 2006)

Asia Mall (opened in 1994)

Eurasia Commercial Capital (opened in 1993)

City Overview


Market Outlook: Changchun is expected to roughly double its urban retail floor space over the medium-term. With a majority of the stock attributed to shopping mall projects, the new supply represents much room in the market for growth potential. Most of the city’s supply is planned for the non-core areas, with the exception of Hongqi Road submarket, which is expected to gain three sizable projects of decent quality; among them, Eurasia International Shopping Centre is predicted to be the most important. The remainder of the new supply will be divided among the emerging areas outside of the city core, with the bulk of it being allotted to the South Metropolis Economic Development Zone. With plenty of new residential housing geared towards the mid-to-upper class, the new commercial zone is expected to house a large concentration of wealthy residents with strong purchasing power – all of whom will be relied upon to support the future projects coming here. Where the city is currently being built up, the South Metropolis Economic Development Zone will also benefit from improving infrastructure in the years to come to help it mature and eventually sustain a high-end retail market of its own. Popular retail precincts in the core areas, meanwhile, are still destined to retain an important central status, and as older projects here upgrade and refresh their tenant mixes, shoppers are likely to be lured with better quality properties and new brand offerings. As local residents find themselves in more comfortable financial situations, they are expected to spend more and drive demand with help from consumers from surrounding cities. By 2020, Changchun residents will see their disposable incomes nearly double from 2013 levels.

Key Indicators Changchun China 30 Ranking







Chongqing Road

Hongqi Road

Guilin Road

Railway Station



The capital of Hunan province, Changsha has carved out a niche as one of China’s leading producers of construction machinery, while its popular Hunan Satellite Television station has also made the city a centre for culture and entertainment media. While the former has driven economic growth, the latter has fostered a strong sense of consumer culture in the city. Changsha is known as a city of spenders, not savers, who spend aggressively on F&B and entertainment. Relatively low housing prices and living costs have further helped people here afford comfortable lifestyles, with Changsha’s disposable income per capita reaching RMB 33,600 in 2013. This level is high by inland standards, and even ahead of larger provincial capitals like Wuhan and Chengdu. Still, local consumers’ price sensitivity towards fashion brands and the city’s smaller overall market size have contributed to a slower pace of retailer expansion in Changsha compared to other inland capitals. However, fast fashion expansion is expected to be sustained in the years ahead as several quality shopping malls are constructed.

Wuyi Avenue submarket: By far the most popular submarket and largest by total GFA, its eight projects are divided evenly between department stores and shopping malls. The Wangfujing and Heiwado department stores are two of the city’s most popular, while the ID Mall and La Nova properties enjoy rising foot traffic and sales as Changsha’s first modern downtown malls. Most Wuyi Avenue projects are solidly mid-range; the recently-opened Wanda Kaifu Plaza initially sought a high-end positioning but pulled back as luxury retailer expansion slowed across China. The Wangfujing department store has had success attracting affordable luxury tenants like Coach and Michael Kors. The new Metro Line 2 has already started to boost foot traffic to the area. Dongtang submarket: This area is a mature, secondary market. It contains department stores as well as one community-oriented shopping mall. Though one of the earliest retail submarkets to emerge in the city, Dongtang has lost some of its influence on shoppers as Wuyi Avenue has grown more prominent. Railway Station submarket: The presence of the luxury department store Friendship Shop makes this the highest-positioned submarket in Changsha. Refurbished in 2008, the Friendship Shop spans two buildings and currently has the highest annual sales of any retail property in the city. Sales growth has, however, faced headwinds amid the recent corruption crackdown, which have impacted sales of luxury goods and use of stored value cards that provide this type of project with much of its business. Gaoqiao and Wuguang submarket: This emerging submarket is representative of the physical expansion of Changsha’s retail market as the city sprawls away from the core area in multiple directions. Current stock is limited, but there are several large projects on the horizon. As an early entrant in this new area, Cimen Fun City opened in 2013 and is still working to generate bigger crowds; the growing number of residents buying homes near the city’s new high-speed rail station represent a key future source of shoppers.

Hongxing submarket: Similar to Gaoqiao and Wuguang, this submarket is home to several future mixed-use developments that will feature significant retail components. Most notable is the very-large future Taskin City project. Though the farthest from downtown of any of Changsha’s emerging submarkets, Hongxing has an advantage in hosting the new offices of the Hunan provincial government; it will also benefit from the future Metro Line 1, set to run north-south through the area. Wujialing submarket: This small submarket contains Maison Mode, which despite its small size, remains one of the city’s leading luxury destinations. Though only one other project currently exists here, a significant amount of new supply is planned, much of it along a portion of Furong Road. This avenue, running north to south through the city, has been designated for intensive mixed-use development as part of an official ‘Eco-Finance Area’ plan. Hexi submarket: Hexi refers to the part of Changsha west of the Xiang River, which represents one of the city’s largest emerging submarkets. Areas closer to the river are already relatively mature. Aux Plaza became the latest addition to this retail market in 2013; its Uniqlo branch is the first fast fashion presence in the submarket, and its F&B offerings have been embraced by nearby communities. There is considerable new supply planned for Hexi, the bulk of which is in the Meixihu area, which the local government has designated as a new sub-centre built around a lake that could emerge as its own submarket in a few years. Hexi University Town submarket: Just south of the main Hexi submarket, malls in this retail precinct are filled with mass market and low-end fashion brands, which are topped off with inexpensive F&B offerings. This submarket mainly serves basic shopping needs of students in the area’s large number of universities.

Changsha

ID Mall (opened in 2012)

Wangfujing Department Store (opened in 2004)

Friendship Store (opened in 1995)

City Overview


Key Indicators Changsha China 30 Ranking







Railway Station

Wujialing

Wuyi Avenue

Dongtang

Hexi

Gaoqiao and Wuguang

Hongxing

Hexi University Town


Market Outlook: A huge amount of urban supply scheduled for the near future is expected to hasten Changsha’s transition away from a retail market dominated by department stores to one in which shopping malls are ever more prominent. Numerous mall projects are being built as part of large mixed-use schemes in emerging submarkets. But even with all of the activity in decentralised areas, the Wuyi Avenue submarket is still expected to remain the centrepiece of Changsha’s retail landscape; currently the city’s most popular shopping destination, it will soon gain further from the completion of Metro Line 1, which places the submarket at a key intersection of Changsha’s emerging subway network. The city’s consumer class is projected to grow from 29 per cent of the population in 2013 to nearly 50 per cent by 2020, adding more than 1 million shoppers to the market. This large consumer base is further expected to prompt retailers to strengthen their presence in the city and contribute to brand diversification here, aspects of the retail market in which Changsha has particular room for growth.


Just west of Wuxi in the wealthy cluster of prosperous cities within the Yangtze River Delta, Changzhou is emerging within the region as an important node on the high-speed rail line that links Nanjing to Shanghai. Supported by a strong local economy built on high-tech investments and a vibrant private sector, Changzhou’s disposable income per capita is nearly the same as major nearby cities such as Wuxi and Suzhou. Despite healthy consumption-related spending, the city’s total retail sales are lower due to Changzhou’s smaller population base. Though Changzhou is nationally infamous for oversupply in the housing market, the city’s retail market situation is less dire. Given that local and national developers have both set their sights on the city, Changzhou is expected to see a surge in high-quality shopping mall projects over the medium-term, and these properties are expected to support the city’s consumption needs for the years ahead.

City Centre submarket: With the largest collection of department stores in the city, this submarket is by far the most popular among local residents and benefits from heavy footfall on evenings and weekends. It has convenient access to multiple lines of the city’s modern bus rapid transit (BRT) system, and is the only submarket to boast a truly citywide catchment area. This submarket is also home to Changzhou’s sole luxury shopping project, Changzhou Shopping Centre department store. Mid-market shoppers flock to the submarket’s bustling South Street, where a pedestrian shopping street and several department stores form the city’s most mature shopping cluster. South Street also contains the highest concentration of international brands, including fast fashion chains like H&M and Uniqlo. This crowded area has limited space for development, and is not expected to receive any new supply over the medium-term. The locally-developed Injoy International Plaza is currently the submarket’s only modern, enclosed shopping mall though its location just beyond walking distance from South Street somewhat limits foot traffic. Future projects in the submarket lie farther to the south.

Wujin submarket: This area is considered to be the new upper-class residential area of Changzhou. The heart of Wujin’s retail rests at the intersection of Changwu Road and Dingan Road and is anchored by a pair of department stores. Wujin’s retail centre of gravity is soon expected to shift northeast towards the locally-developed Injoy Plaza, which has emerged as one of Changzhou’s most successful modern mall properties. With the recent addition of a Wanda Plaza, the area is cementing itself as a major shopping destination. Many of the other properties here are open-air, strata-sold shopping complexes; many of these projects were built to imitate those in downtown’s South Street pedestrian street, but have failed to gain the same traction. Xinbei submarket: Literally meaning “New North,” this new, master-planned urban submarket contains a large number of government offices, residential communities, and Changzhou’s top tourist attraction, China Dinosaur Park. The most successful retail project here is a Wanda Plaza on the main north-south arterial. Several future projects are planned for the area next to the dinosaur theme park, in hopes of drawing on both tourist traffic and the large number of residential communities under development nearby. Farther to the north near Changzhou’s high-speed rail station, Yuexing Group’s Global Harbour project will soon become the largest retail property in Changsha, with a GFA of over 300,000 sqm. Much of the project is expected to be leased to entertainment and F&B tenants.

Changzhou

Injoy International Plaza (opened in 2012)

Changzhou Department Store (opened in 2008)

Taifu Department Store (opened in 1993)

City Overview

City Centre

Zhonglou West


Market Outlook: Following in the typical trend of Tier 3 cities, Changzhou’s traditional mix of department stores and open air, strata-sold retail concepts will increasingly share the stage with modern shopping mall formats. Future supply is expected to be spread out roughly evenly among existing submarkets as well as the emerging Zhonglou West. The leading South Street cluster is not expected to see any new supply, but is expected to retain its market-leading position due to its central location and strong-performing department stores. Changzhou’s retail market contains an unusually large number of open-air, strata-sold malls, but it is the wholly-owned, enclosed and climate-controlled malls, such as those built by Wanda and local developer Injoy, that will have a bright future as these properties offer better flexibility for retailers. Projects which fail to measure up to the standard set by these newer properties will struggle to perform well in an increasingly competitive market. Strategically located quality malls can expect to benefit from a growing local population and rising disposable incomes, which are expected to grow by some 75 per cent from their 2013 levels by 2020. The influx of new, modern retail space is further predicted to usher in a greater diversity of brands to Changzhou, which will help the city to retain a greater share of the customers who previously travelled to larger, nearby cities like Nanjing or Shanghai for shopping.

Key Indicators Changzhou China 30 Ranking







City Centre

Xinbei

Wujin



The capital of Sichuan province, Chengdu is regarded as one of the most important economic, transportation and communication centres in West China and is supported by a large group of middle-class residents with diverse spending habits. Considering its geographical significance and strong culture of mass consumption, Chengdu is favoured by international fast fashion and luxury retailers as a point of entry into the region. The city also records robust retail sales growth and has a strong presence of international retailers, one of the highest among “Tier 1.5” cities. The city’s retail boom and rapid urbanization have led to the emergence of several new commercial shopping clusters overnight, in stark contrast to the small group of retail precincts serving consumers just a few years ago.

Chunxi Road-Yanshikou submarket: The most significant precinct in the city core, this area serves customers from not only Chengdu, but much of Sichuan province as well. This mature retail cluster, centred on a long pedestrian street, has a high concentration of fast fashion and high-end retailers who pay Chengdu’s highest average rents. Anchored by the city’s newest and highest-end mall, IFS, the submarket will soon be joined by Taikoo Li and The Atrium to strengthen the area’s status as a top destination. Luomashi submarket: Something of a faded giant, this submarket previously drew more attention as a major retail cluster, but its aging properties and declining popularity have led to a noticeable decline in foot traffic. This situation is not expected to change unless ambitious redevelopment plans are launched.Jianshe Road submarket: Among the most densely populated urban areas in the city, Jianshe Road was redeveloped from an industrial area into a settlement of mid to high-end residential projects. With ensuing commercial development, future retail projects will tap into consumer demand from surrounding residents, who are developing increasingly affluent tastes. City South and Xinnan Tiandi submarket: Buoyed by a high concentration of consumers with relatively strong purchasing power who live in the surrounding high-end residential projects, as well as some of the most mature housing in the city, this area also benefits as a secondary CBD for Chengdu. Market leader Chengdu Galleria, among the best-performing malls in Chengdu, is strategically located here.

Jinsha-Guanghua and Shuangnan submarkets: Popular among tourists, the precinct also includes a traditional mid to high-end cluster of residential projects. The submarket is also near the Huanhuaxi area, which is home to a high concentration of the city’s villas. A handful of future projects are expected to take advantage of this nearby population with strong purchasing power. Dongda Street and Extension submarket: A more recently developed decentralised precinct, the submarket has emerged to form the city’s newest CBD and transportation hub. Still evolving, the area is slated to host a future cluster of mid to high-end retail projects to add to the submarket’s MixC and new Yangguang Center mall. Metro Line 2 provides accessibility to the area. New South Area submarket: This emerging submarket houses another of the city’s new CBDs and is key to expanding Chengdu’s urban area. Ito Yokado has its third project in the city here. The retail precinct is expecting one of the city’s largest amounts of future supply over the medium-term, offering plentiful options for retailer expansion.City North submarket: Formerly a cluster of wholesale markets, this submarket is undergoing redevelopment and has a large future supply coming that is expected to reinvent the area. Jinniu Wanda Plaza is the highlight of this precinct, which has access to Metro Line 1.

Chengdu

IFS (opened in 2014)

New Century Global Mall (opened in 2013)

MixC (opened in 2012)

City Overview

City South and Xinnan Tiandi


Market Outlook: Chengdu has progressed quickly over the years, forming the foundations of a sophisticated retail environment that will be furthered by a considerable amount of high-quality projects on the horizon. The city is expected to double its supply of urban shopping centres in terms of floor space over the medium-term. The huge influx of projects is projected to intensify competition, especially along major inbound travel routes as most new malls will be built in newer areas between the city core and the suburban areas. A comprehensive urban rail network plans to feature a total of 10 subway lines over some 400 kilometres of track by 2020. This will further enhance connectivity among major retail precincts in the future. The projects in the most advantageous locations with experienced leasing and property management operations are expected outperform and attract a greater number of retailers to the city as well as introduce even more new brands to Chengdu. At the same time, Chengdu residents are becoming richer and this will support consumption demand as the retail market becomes more saturated in the coming years. By 2020, the population size of Chengdu’s 2013 consumer class is expected to double.

Key Indicators Chengdu China 30 Ranking







Chunxi Rd-Yanshikou

Dongda St. and Extension

City South

Jinsha-Guanghua

New South Area

Jianshe Rd

Xinnan Tiandi

Shuangnan

Luomashi

City North



One of the fastest-growing cities in the country, Chongqing has benefited greatly from central government policies to develop the nation’s vast western expanse. During the course of its development in the last decade, Chongqing has swiftly transformed its retail market – quadrupling the size of its modern retail floor space from 2007 to 2013 – to compete with neighbouring Chengdu as the premier shopping destination in the region. In 2013, Chongqing’s retail spending outdid that of Chengdu by 20 per cent, with sales totalling an impressive RMB 451 billion. The retail spending total enabled Chongqing to achieve a notable fourth place ranking in the category nationwide. Although the city’s GDP per capita and retail spending per capita still lags behind that of first tier cities, rapid urbanization in the region is perpetually growing residents’ disposable income levels. As such, Chongqing will continue to gain strength as an integral shopping destination with great potential for domestic and international retailers.

Jiefangbei submarket: Filled with a smattering of office buildings in the CBD core and featuring a renowned pedestrian street of shopping malls and department stores, this area represents one of the most mature mid to high-end retail markets in Chongqing. With convenient access to Metro Lines 1 and 2 and the future Metro Line 6, the submarket is popular among locals and tourists. The high-end Chongqing Times Square project does well here. The submarket is also home to Chongqing’s first real shopping mall, Chongqing Metropolitan Plaza, developed by Hutchison Whampoa in 1997. It has sustained its popularity over time, and it continues to attract heavy footfall. CapitaLand’s biggest Raffles City project in Asia with a planned retail GFA of over 200,000 sqm will be the area’s next major landmark. Guanyinqiao submarket: Another popular submarket, this area appeals to young and trendy shoppers. Longfor’s first successful project in Chongqing, Paradise Walk (North), opened here in 2003, and retains its market-leading position in the submarket. Upgrading and repositioning have led the area to evolve from a mass market to a mid to high-end retail precinct in recent years. Some older buildings are undergoing layout modernization, and tenant mixes are continually being adjusted to move upmarket. More than 300,000 sqm of additional prime retail stock will enter this area over the medium-term and will solidify the area’s importance. Starlight 68 shines under strong operation and leasing strategies. Chongqing’s biggest department store developer Chongqing General Trading Group plans to open its first mall here, Sunshine Shopping Mall. Also here, the future Chongqing Longcin Centre is being built by motorcycle producer Longcin Group; the case highlights overwhelming confidence in the city’s retail real estate market as more non-traditional retail developers build shopping centres.

Nanping submarket: A densely populated area, Nanping is the southern gateway to Chongqing. The area is also being revamped to target more of the upper mid-range market, a segment quickly growing in both appeal and affordability to a broader spectrum of people in the city. Total retail floor space here is quantitatively impressive as its projects outnumber that of almost every other submarket. Nanping’s landmark property is Starlight Place, which is built on a steep slope and has a unique glass atrium skylight, and is home to a rich selection of international brands.Daping submarket: Like Yangjiaping submarket, it has a dense population of local residents. Just two projects within walking distance make up the prime retail here. Times Paradise Walk is the best performer, while two additional phases for the project are expected to drive retail development of the submarket in the future. The area benefits from access to Metro Line 1.Yangjiaping submarket: A busy crossroads at the centre of this precinct characterizes the crowded nature of this traditional residential area. Frequented by residents in the city’s south and with access to Metro Line 2 and the future Circle Line, the submarket has a focus on mass market shopping, catering to people with lower incomes. A massive MixC project will boost this undersupplied retail precinct in the future and add a touch of mid-range offerings.Xinpaifang submarket: As a new mid-range to high-end residential precinct in the north of the city, Xinpaifang has emerged as a promising retail market and is supported by surrounding residents with strong purchasing power. Already linked by Metro Line 3, the retail precinct will be bolstered by links to future Metro Lines 5 and 6 as well as the Circle Line. The relatively new Fortune Mall and SM Chongqing Yubei City do well. Two more future projects here are expected to build retail momentum.

Chongqing

Chongqing Times Square (opened in 2011)

Starlight 68 (opened in 2010)

Paradise Walk (North) (opened in 2003)

City Overview


Market Outlook: Over the medium-term, Chongqing’s urban retail floor space is expected to nearly double, marking the city’s first large-scale modern supply boom. Though Chongqing is oversupplied at the city level, at the submarket level, saturation is not an issue. Key retail precincts like Jiefangbei are arguably undersupplied, given the rising demand and taking into consideration that some international brands have yet to enter. Jiefangbei and Guanyinqiao submarkets will continue to be the city’s top destinations. In Jiangbei district, the Jiangbeizui area, planned as a future CBD along the river, is expected to develop into its own retail precinct in the future. Fast fashion and light luxury retailers will take the market lead, supported by the city’s rising GDP and local residents’ growing disposable income levels. Chongqing residents are expected to see their disposable incomes nearly double from RMB 25,200 in 2013 by 2020, allowing them to better support their consumption habits, which are becoming more discernable by the day. A big consumer class will also be an important retail sales driver in the future, given that the demographic will triple from 11 per cent of the local population in 2013 by 2020, presenting Chongqing with an extra 6 million consumers.

Key Indicators Chongqing China 30 Ranking







Jiefangbei

Guanyinqiao

Nanping

Yangjiaping

Daping

Xinpaifang



Touted as a gateway to Northeast China, the coastal city in southern Liaoning province is at the heart of the central government’s agenda to revitalize the region. Dalian is a mature seaport city that has benefited greatly from strong Japanese investment, and is now considered as a transitional “Tier 1.5” city as it has been among the quickest to prosper and develop, regionally. Dalian enjoys a higher disposable income per capita than all three of China’s north-eastern provincial capitals. The relatively strong incomes of local residents have helped consumerism and brand recognition take hold in Dalian. Domestic tourism is also a driver of Dalian’s retail market, with some 52.3 million domestic tourists and 1.2 million foreign visitors coming to the city for its mountain and water scenery, pushing up retail sales to RMB 253 billion in 2013. Overall, the city’s steady development of a modern retail market continues to attract an increasing number of international retailers, with Dalian often chosen as an entry point into the country’s northeast region.

Renmin Road submarket: The first high-profile retail precinct in the city boasts Dalian’s highest concentration of high-end properties: Times Square, The Galleria and Friendship Shopping Centre. Located in the heart of the city’s original CBD, the submarket is surrounded by upscale hotels and offices, which help to draw people to the area. The future Metro Line 2 is expected to give the submarket an added boost. To the east, this area will be extended in the East Port development area, which will contain a multitude of new, high quality projects.Qingniwa submarket: A mature shopping district with a high concentration of fast fashion and mid to high-end retailers, it is also seeing the presence of light luxury brands grow. Parkland shopping mall is popular here, while Northeast China’s largest retailer Dashang Group also operates several successful projects in the submarket, where department stores remain the dominant retail format. With a pedestrian street forming the highlight of this area, this submarket with major retail destinations enjoys high foot traffic and has the added advantage of being conveniently accessible to all other parts of the city. The future Metro Line 1 should further increase footfall. Xi’an Road submarket: This mature retail precinct receives almost as much foot traffic as Qingniwa due to strong public transit links and its sizeable catchment area; it is further expected to benefit from future Metro Lines 1 and 2. Tianxing Roosevelt Shopping Centre, positioned at the mid-market, has done well to introduce fast fashion to residents living in the nearby clusters of housing, a strong source of demand for this submarket.

Xinghai Bay submarket: An emerging financial district with several high-end and luxury residential projects in the pipeline, this area has Peace Plaza, which is positioned at the mid-market. The submarket’s future potential is also bright, given the government-led support to develop the area. But with limited planned retail projects on the horizon, it could take years to develop the market here. The future Metro Line 1 will link up to this submarket. Olympic Square submarket: Located near a group of local government buildings, this submarket has one key project, an older-generation Wanda anchored by a Parkson, which serves nearby residents. Hang Lung plans to open the city’s largest shopping centre here, and the mid to high-end property is expected to be a major boost for the area in the future. Tianjin Street submarket: A smaller submarket tucked between Renmin Road and Qingniwa submarkets, this retail precinct near the local railway station is a historic shopping district that serves the mass market and features a traditional night market. Local residents frequent the area where the mass market-oriented Kaisa Plaza has been gradually upgrading to include more mid-market brands, such as C&A.

Dalian

Tianxing Roosevelt International Center (opened in 2005)

Parkland (opened in 2002)

Mykal Department Store (opened in 1998)

City Overview


Market Outlook: The city’s retail market is among the more developed in the region, second only to its provincial capital, Shenyang. Though Dalian failed to make China’s top 10 retail spenders in 2013, the city still managed substantial retail sales, indicating great potential for the market ahead. Like much of China, Dalian’s rising middle-class is expected to drive consumption growth in the future. By 2020, the city’s consumer class is predicted to nearly double from 1.1 million people in 2013. As city borders continue to expand outward, emerging East Port and Ganjingzi will be key areas to watch on the horizon as population rises and more people settle in these new parts of the city. In decentralised areas, where space remains abundant, the city will see a greater transformation of its retail landscape over the medium-term as shopping malls almost exclusively characterize the format of new supply. Though department stores still have a large share of the downtown market, the high foot traffic at several new shopping mall projects in core areas is proof that savvy shoppers prefer the modern properties, which continue to bring a wider range of international brands to the city. As more shopping malls open in Dalian, the trend is expected to lift the retail market’s overall positioning as the majority of such projects emphasize the mid to high-end segment. The mature information technology sector and the rapidly expanding financial services and tourism sectors will generate strong employment opportunities in Dalian and also propel demand for more mid-range and high-end destinations in the years to come.

Key Indicators Dalian China 30 Ranking







Renmin Rd

Qingniwa

Xi'an Rd

Xinghai Bay

High Tech Zone

Olympic Square

Tianjin Street



Made up of five dispersed districts, this prefecture-level city in South China’s Guangdong province holds a young retail market that has developed separate retail clusters in each district. Though Foshan benefits from a large population of residents with strong purchasing power – derived mostly from the city’s flourishing private firms, most consumers have the habit of traveling to nearby Hong Kong to shop for high-end goods as is the case with most affluent residents in Guangdong. This led the local retail market to mostly develop the low-end market early on. However, more mid-range properties are starting to appear. Shopping malls already almost completely dominate the market in terms of properties as an overwhelming majority of projects were built from 2000 onwards. The city’s newest properties offer a plethora of international brands.

Guicheng submarket: The busiest submarket in the city lies at the heart of Nanhai district, which has the highest residential population of all districts. The area has a broad appeal, attracting consumers as well as white-collar workers from a developing CBD in this area. Metro Line 1 has done well to bring in more foot traffic, but most local residents own their own vehicles and prefer to drive to where they shop. Poly Canal Plaza and CapitaMall do relatively well; emphasizing the mid-range market, the projects offer mostly domestic brands. Vanke and Wanda are both setting up future projects here. This area of the city, the closest to Guangzhou, is developing faster than any other area as more Guangzhou residents are looking to buy newer, more affordable housing. If home purchase restrictions remain lifted in Foshan, this gives the area more growth potential than any other submarket in the city and bodes well for future retail demand. Zumiao submarket: At the centre of Foshan in northern Chancheng district, this traditional residential area’s highlight is a shopping street. Lingnan Tiandi by Shui On is set to open in the near future and is highly anticipated to be the submarket’s best project. Two older, mass market malls, Tour Mall and Baihua Square, are not very competitive, while Xinghua Department Store is one of the city’s oldest properties. Local residents and tourists come to the area more for F&B as opposed to fashion apparel given the low quality of clothing and accessory brands here.

Jihua submarket: This area is secondary to Guicheng, and is a maturing market that has benefited from three malls that are of higher quality than those in other submarkets, all developed by relatively experienced developers. The area is convenient for local residents. Greenland is coming soon with a large mixed-use project; the developer also recently purchased another plot of land across the street. Fast fashion and mid-range brands are expected to do well in this area. Foshan New Town submarket: In the third district of the city to develop, this area has been planned by the local government as a new economic industrial zone. Just one prime shopping mall currently exists, Star Plaza. Completed in 2013, it targets the mid-range and is popular for fast fashion brands like Uniqlo. The project is mostly frequented by a slowly growing office crowd. Several future projects will increase the submarket’s floor area significantly over the medium-term.

Foshan

Poly Canal Plaza (opened in 2009)

CapitaMall (opened in 2006)

Xinghua Departement Store (opened in 1982)

City Overview


Market Outlook: Foshan is expected to quadruple its urban retail supply over the medium-term. The market is upgrading its overall positioning though it is not expected to develop a luxury market anytime soon given local residents’ strong preference for shopping in Hong Kong. Though Guangzhou is closer, the travel times to both cities are roughly the same at about an hour. Large-scale mixed-use projects contribute to the majority of the future supply and will give the city ample retail options; this will leave retailers with many opportunities to enter the market and subsequently expand to grow their presence. Mid-range brands and fast fashion are expected to do the best moving forward given the nature of the future supply. Experienced developers like Wanda and Vanke are expected to enter and accelerate Foshan’s market maturity. Guicheng will develop the fastest as the most desirable area, leading the city’s urban population surge, which is expected to grow by more than 1 million people by 2020. Local residents will also see a significant rise in their disposable incomes as they are projected to rise by as much as 75 per cent by 2020 from RMB 38,000 in 2013. All of this will support a steadily expanding retail market.

Key Indicators Foshan China 30 Ranking







Guicheng

Jihua

Foshan New Town

Zumiao



Though less famous than its more tourist-friendly neighbour Xiamen, Fujian’s provincial capital of Fuzhou boasts a larger population and GDP, and its rapidly growing economy has powered local retail sales to nearly three times the level of Xiamen’s. Roughly half of Fuzhou’s retail stock is composed of shopping malls, and with department stores accounting for no more than a fifth of the future supply, the city is set to continue embracing modern shopping centre formats. Most demand is driven by local residents and visitors from smaller cities like Ningde and Nanping in northern Fujian, who have fewer retail options in their local markets. Fuzhou’s university town also generates a strong customer base of students. As local residents earn higher incomes and are able to afford more brands, consumption demand and rising brand awareness are expected to boost the overall market.

Dongjiekou submarket: The city’s most mature and popular shopping destination, Dongjiekou is home to a concentration of department stores serving the mid-range and high-end markets. The cluster includes the Fuzhou Grand Ocean Classic mall, which is the city’s sole luxury destination. Given limited local demand for luxury products, this is likely to be the extent of the city’s luxury market for the foreseeable future. The Wangfujing Department Store also attracts middle-class shoppers and tourists with strong purchasing power. The city’s nearby traditional CBD provides a steady stream of shoppers from its large population of white-collar workers as well as provincial and municipal government workers. A future MixC project is expected to complement this submarket’s upmarket offerings with a variety of new brands. Metro Line 1 will run through this submarket and is expected to further bolster foot traffic. Wanbao submarket: This area also benefits from heavy footfall and is accessible from the university town in Minhou and its cluster of universities by the Third Ring Road. The low to mid-range Value Mall and Powerlong City Plaza are the area’s two main malls. A Suning Plaza opened in 2013 and has done well to draw some customers from the two properties, thanks in part to it being the first mall in the submarket with a mid-range positioning. A new Grand Ocean department store is expected to open with a similar positioning and raise the submarket’s overall positioning. Due to the ongoing construction of the new CBD just north of the nearby Min River, this submarket is upgrading relatively quickly.

Taijiang submarket: With just a few prime retail projects, the submarket caters to locals and tourists. The low to mid-range Dong Bai Yuan Hong shopping mall receives good foot traffic due to its favourable domestic brands and F&B offerings. Wanda Plaza opened in 2010 and is among the more popular projects in the submarket, attracting many customers with its mid-range offerings. Cangshan submarket: This submarket contains the city’s other Wanda Plaza, which opened in 2011. As the first prime retail offering in this young submarket, Wanda Plaza does even better than its predecessor, drawing substantial foot traffic from residents of the area’s government-developed affordable housing. The area is also close to the universities, so students also come here to shop. This Wanda’s fast fashion offerings are hot-sellers among the area’s price-sensitive crowds. Several projects are scheduled to enter this market over the medium-term, as developers want to take advantage of the area’s customer base.Xindian submarket: This newly emerging submarket currently just has one prime retail project, Thaihot Plaza, which opened in 2013. The well-managed project is oriented towards community-shopping to serve the area’s currently limited population of local residents. Though lots of residential projects are under construction in the area, it is not expected to receive any new retail supply over the medium-term. Developers are interested in seeing this area’s population increase before making plans for major retail projects.

Fuzhou

Thaihot Plaza (Wusibei Store) (opened in 2013)

Powerlong City Plaza (opened in 2007)

Fuzhou Grand Ocean Classic (opened in 2007)

City Overview


Market Outlook: Fuzhou is expected to nearly double its current urban retail floor space over the medium-term. The Cangshan market in particular is expected to see several large-scale retail projects. The mature Dongjiekou submarket will receive the second-largest amount of new supply. Overall, more than 60 percent of the city’s new supply will focus on serving emerging retail markets in decentralised areas. Government plans to develop affordable housing will help Mawei and Jin’an to emerge as retail submarkets. Though no retail stock exists in these areas now, a handful of sizable future projects are planned over the next few years. Large-scale projects account for a substantial portion of Fuzhou’s future supply and are expected to transform the city’s retail landscape as mega-malls account for an ever-growing share of the city’s prime retail space. Fast fashion is just starting to take off in the city, and as more modern malls come online, the pace of retailers’ expansion is expected to quicken. Fuzhou will put its first metro line into operation soon, and this is predicted to improve connectivity between submarkets and enhance trade at properties with direct subway connections. Meanwhile, local residents’ rising incomes will help drive consumption growth. Some 25 per cent of Fuzhou’s population belonged to the consumer class in 2013. This share is expected rise to half of the city’s population by 2020.

Key Indicators Fuzhou China 30 Ranking







Dongjiekou

Taijiang

Xindian

Cangshan

Wanbao



With one of the largest and most-established retail markets on the mainland, the capital of Guangdong province has advanced rapidly in recent years and now serves as a retail hub for a local population of deep-pocketed consumers as well as a wide spectrum of shoppers from a dozen surrounding cities within the highly urbanized Pearl River Delta. Visitors come to Guangzhou in search of a full range of retail products – from low-end items to luxury goods – while local residents rank high on the mainland in terms of disposable income per capita. Guangzhou residents are expected to continue to be major spenders in the future as their disposable incomes rise to become one of the highest in the nation by 2020. Guangzhou is famous for the annual global product sourcing “Canton Fair,” owing to the surrounding region’s extensive manufacturing base. As Guangzhou developed relatively early compared to other Tier 1 cities in China, local residents have had more time to build up considerable wealth.

Tianhe North submarket: Guangzhou’s fastest-growing submarket by population has a mature and established cluster of retail properties, which benefit from easy access to Metro Lines 1 and 3 as well as a special urban rail commuter-line. Foot traffic in this area is high and visitors can easily walk between the key properties. Landmark properties in this area include Tee Mall, Grandview Plaza, and the relatively new Taikoo Hui. The latter, a highly successful project developed by Swire, contains a dual focus on luxury and mid-market brands, which are located on different levels of the property. The next major development will be Parc Central by Sun Hung Kai Properties. All of these have drawn a high concentration of international brands to the area, successfully raising the city’s overall retail profile in recent years. Beijing Road submarket: This area is a popular pedestrian street and traditional old-style retail area targeting the mass to mid-range segments. Department stores and street-side shops are common here. A tourist highlight for regional visitors, the area has convenient links to Metro Lines 1, 2 and 6. However, like many old-style retail areas in China, it is at risk of obsolescence from newer submarkets.

Huanshi East submarket: The original CBD was the first to house high-end brands and serves as the city’s most mature retail submarket. An older but loyal group of brand-sensitive shoppers continue to support retail in this area. Huanshi East is not expected to see much additional development in the future. Shangxiajiu submarket: In the western corner of the city with landmark projects Hengbao Plaza and Metropolitan Plaza, this area is gradually upgrading its positioning from what was previously low-end. Metropolitan Plaza, for example, has added a number of key international brands. Efforts to adjust the submarket’s tenant profile have helped the area appeal to more of today’s young and trendy mid-market shoppers. Zhujiang New Town submarket: The new CBD of Guangzhou has emerged as a key retail area in recent years, given the speed of development and construction of several new projects, including West Tower and Seasons Mall in 2010. This area benefits from a huge and growing population of office workers. More projects on the way, including a K11 art-themed mall, are expected to enhance the gravitational pull of this submarket and establish the area as a weekend destination.

Guangzhou

Taikoo Hui (opened in 2011)

Onelink Walk (opened in 2010)

Grandview Mall (opened in 2004)

City Overview


Market Outlook: With a speedily expanding metro network slated to double its 2010 track length by 2020, and a steady influx of high-quality supply, Guangzhou is progressively expanding its bustling retail landscape. New developments are likely to help Guangzhou close the shopping mall quality gap with other Tier 1 cities. Development of the city’s decentralised areas will focus on Haizhu, Panyu and Baiyun districts. Projects coming to these emerging areas are expected to whet local residents’ appetites for more mid-market products. Meanwhile, core areas in the city will mature, but not without facing the challenges of slowing growth and fierce competition. Landlords will need to differentiate themselves in the market and get creative to battle the rise of e-commerce, but plenty of opportunities in the market will remain, particularly in the F&B sector. With all of the new supply, both domestic and international retailers will have more chances to increase their presence in the city by opening more locations. Guangzhou residents will continue to spend freely as more of them earn higher incomes and the consumer class rises to nearly 75 per cent of the city’s population in 2020.

Key Indicators Guangzhou China 30 Ranking







Tianhe North

Huanshi East

Zhujiang New Town

Beijing Road

Shangxiajiu



Among the most prosperous cities in the Yangtze River Delta, the capital of Zhejiang province in East China possesses one of the highest living standards in China. With an impressive per capita disposable income of nearly RMB 40,000 at end-2013, Hangzhou also made the top 10 nationally for retail sales. In addition to benefitting from a strong presence of private enterprises and a flourishing IT industry, Hangzhou also benefits from being one of China’s top tourist destinations and a major shopping attraction for residents in northern Zhejiang province. All of this supports Hangzhou’s promising luxury retail market – the most developed among “Tier 1.5” cities. Fast fashion brands like H&M and Zara, meanwhile, have established a broad presence across the city in a very short period of time.

Wulin submarket: Connected by Metro Line 1, the city’s oldest retail submarket has been well-established for more than three decades. Largely dominated by locally operated mid to high-end department stores, the area’s key landmark is the massive Hangzhou Tower department store complex which forms the main draw for luxury shoppers. Limited land remains available for additional development. Hubin submarket: With consistently high foot traffic from tourists who flock to the West Lake, properties in this area benefit from the lake’s status as a must-see attraction. Metro Line 1, soon to be followed by Metro Line 2, help link the area to the city’s residential population base. The waterfront area remains busy with tourists year-round. Hubin InTime is the biggest retail complex in this area, with Phase 2 showing a strong following due to its mid-range positioning and plentiful dining options, which make it a solid fit for the area’s consumer profile. Kerry’s project will be an upcoming landmark in this area.Qianjiang New City and Qingchun submarket: This new CBD area in the east is situated within close proximity to the traditional city core, closer than most new CBDs across China. Supported by dozens of newly built office towers and residential buildings, the area boasts a MixC, which has developed into one of Hangzhou’s most successful malls since opening in 2010. MixC has succeeded in pulling in customers across a vast

geographic area, including wealthy east Hangzhou, and is increasingly introducing more premium and affordable luxury brands. MixC will be joined by a Raffles City within walking distance in the future. The two differently positioned malls are expected to drive foot traffic together as they create a clustering effect. Connectivity to Metro Line 2 will provide a further boost to the area. City Northwest submarket: With access to the expressway to Shanghai, this large, wealthy residential area of Hangzhou was undersupplied for years, but now has a growing retail presence. Two key projects are InCity XiXi and InTime Shopping Mall, both mid-range shopping centres with a strong selection of international brands. The area is known for strong consumption power and high car ownership rates. Binjiang submarket: This emerging part of Hangzhou is at an earlier stage of development. Star Light Avenue, an open-air shopping centre, is the main offer available and contains mostly mass-market F&B which serves nearby office workers. Two smaller, mass market projects are planned for the near future. With many pricey high-end residential projects developed in this submarket by the Qiantang River, and many new office towers under construction, it is only a matter of time before we see big name brands enter.

Hangzhou

InCity Xixi (opened in 2013)

Intime Shopping Mall-Chengxi (opened in 2013)

MixC (opened in 2010)

City Overview

Jiubao and Xiasha

West Lake Scenery Spot

BinjiangXiaoshan

Hubin

City Northwest

WulinQianjiang New City

and Qingchun

West Lake

XiXi Wetland Park

Existing PropertyMetro Line (operating)Metro Line (under construction)


Market Outlook: As Hangzhou rapidly urbanizes, it continues to attract a swelling number of new residents. The flood of new arrivals in recent years, coupled with rapidly increasing sophistication in shopping habits, have combined to fuel the expansion of new retail areas. Due to the considerable cohort of middle-class residents, Hangzhou’s roads are often congested by a large population of private car owners, but the build-out of the metro network may offer some relief and also improve accessibility to emerging retail precincts. Considering the city’s wealth level, Hangzhou had relatively few shopping centres until recently, and is still catching up to demand. Though much of Hangzhou’s retail development will be in the suburbs, and shopping habits will become more suburban mall-focused, downtown projects are still expected to retain weekend destination status. Development activity in suburban Xiasha university town and Xiaoshan, by the airport, will serve demand from rich residents living in nearby counties. New, high profile developments in Xiasha and Xiaoshan will result in some of the highest quality suburban retail development in the East China region.

Key Indicators Hangzhou China 30 Ranking







Wulin

Hubin

Qianjiang New City & Qingchun

City Northwest

Binjiang



The capital and largest city of Northeast China’s Heilongjiang province, Harbin claims one of the more developed retail scenes in the region. Given the considerable size and scope of Harbin’s market, which serves as the premier shopping destination provincially, the city managed a respectable RMB 273 billion in retail sales for 2013. Surrounding provincial residents who lack quality shopping options in their hometowns will continue to contribute to the city’s overall retail market as they look to Harbin for a better selection of brands and product assortment. Harbin also gains from having one of the largest economies in Northeast China and enjoys close business ties with Russia. All of this is expected to continue stirring economic growth, which will increase the incomes of local residents. Similarly to the rest of China, consumers here will drive the bulk of the city’s consumption growth as their living situation improves in the coming years.

Central Street submarket: Offering a broad spectrum of price ranges, Central Street holds the city’s most significant retail cluster and reaches the largest number of shoppers as it is popular among locals and tourists alike. Dominated by department stores that cater to the mass, mid-range and high-end markets, the retail precinct is home to several of Harbin’s most frequented projects and experiences heavy footfall. Mykal Department Store enjoys a strong reputation as one of the city’s highest-end projects, attracting many local consumers and people from outside the city. Younger crowds, meanwhile, tend to migrate towards Euro Plaza, which draws shoppers in with fast fashion retailers like H&M and Zara. Harbin New 100 Shopping Mall is another top-performer due to its strong promotional offers and marketing campaigns, while Harbin Central Mall, among the very first department stores to set up in the submarket, benefits from a loyal group of older shoppers, who have long formed the habit of shopping here. Several street-side stores in the area also do well to reach younger crowds. Future Metro Lines 2 and 3 are expected to give the submarket another boost.

Qiulin submarket: Also highly popular for shopping, Qiulin boasts the highest concentration of high-end department stores and attracts more affluent crowds. With access to Metro Line 1, the retail precinct benefits from a clustering effect as a number of projects are within walking distance of each other and help to drive strong foot traffic. A majority of the projects are within the mid to high-end spectrum of the market, which does well to welcome middle-class crowds locally as well as from surrounding cities. The most popular project here is Grand Shopping Center, which is increasingly being sought after for its selection of premium brands. Xingsha Shopping Center and Huaqiao Plaza will add to the submarket’s future supply, but will likely face stiff competition from the incumbent top-performer Grand Shopping Center. The area will also gain from future access to Metro Line 2. West Station submarket: This emerging submarket is anchored by a relatively new Wanda Plaza that opened in 2013. By serving surrounding local residents’ pent-up demand for quality retail, the project has been quick to penetrate the market. CapitaMall Shuifu, which set up just outside the submarket’s Metro Line 1 link, caters to nearby university students and local residents. The student population in this retail precinct remains a strong source of consumption demand, while local residents living in the area are also expected to support the market here.

Harbin

Wanda Plaza (Haxi) (opened in 2013)

Mykal (opened in 2009)

Euro Plaza (opened in 2006)

City Overview


Market Outlook: With Central Street and Qiulin submarkets already very developed, these top retail submarkets are unlikely to see much new supply over the medium-term due to limited land availability. Future projects such as CRC Fun Shopping Center and Wanda Cultural Tourism City, meanwhile, will be located in the city’s Songbei district, viewed as an up-and-coming area of Harbin. These projects have potential in the coming years as population rises and citywide infrastructure improves to bring this new area within reach of the rest of the city’s population. Though the city is not oversupplied at the moment, there is risk of temporary imbalance in the future as Harbin more than doubles its retail floor space within the next few years. The rise of shopping malls is set to provide opportunities for fast fashion to expand in the market. Given that the number of luxury stores is likely sufficient to meet demand for the next while, most opportunities will lie in the mid-range market. The population size of Harbin’s 2013 consumer class is set to more than double by 2020. This huge jump over the next several years will give the city more than 1 million additional shoppers, representing great demand potential in the future.

Key Indicators Harbin China 30 Ranking







Qiulin

Central Street

West Station



The capital city of Central China’s Anhui province has in recent years benefited from waves of investment and industries relocating inland to seek lower costs. This economic activity has aided the quick development of Hefei’s physical retail landscape, giving the city a clutch of new modern, enclosed shopping malls that are impressive for the city’s size and inland location. Functioning more and more as an inland extension of the prosperous Yangtze River Delta, Hefei has attracted several national developers in recent years. However, local developers still play a strong role in shaping the retail scene. Unlike other comparable cities, Hefei has largely refrained from the “bigger is better” model of retail development, and as a result much of the market consists of smaller projects targeting the needs of local residents rather than oversized properties that have been launched in immature markets with little existing demand. This approach has led to a comfortable supply situation in most of the market. Hefei’s automotive and appliance manufacturing sectors are expected to continue booming over the next several years, raising local residents’ incomes and supporting the entrance of new and more diverse brands.

Si Pai Lou submarket: Crowded with department stores, this mature area is packed with multiple branches of the local Baida and Commercial Capital department store chains, as well as local stores of the national Golden Eagle and international Parkson department store brands. The newest and most notable project here is Intime Center; completed in 2013, the property has already become a fixture of Hefei’s luxury shopping scene thanks to its central location and blending of a department store format with an inviting design that mimics a high-end mall. Densely-packed Si Pai Lou also benefits from a strong office crowd in the city’s traditional CBD, though no future supply is expected here over the medium-term as land supply is tight. Ma’anshan Road submarket: This submarket lies just southeast of Si Pai Lou and is anchored by Baohe Wanda Plaza, which in 2010 gave the Hefei market its first modern, enclosed shopping mall. The mall stands out even among other Wanda Plazas thanks to the high-end positioning of its Wanda Department Store, which offers brands like Gucci and Dunhill. The even plusher Yintai Center began providing some competition in 2013 in nearby Si Pai Lou, but Wanda continues to support a loyal customer base from around the city. San Li An submarket: This submarket is centred on the retail cluster of Cosmo City and Guo Gou Plaza. Cosmo City is an example of a well-executed locally-developed mall. It has emerged as a fixture of Hefei’s mid-range shopping scene, anchored by a Grand Ocean department store, fast fashion branches, and a number of national F&B chains, including a Haidilao hotpot restaurant. Guo Gou Plaza’s mass market clothing options and Gome and Carrefour anchors make it a somewhat lower-positioned complement to Cosmo City.

Huangshan Road and Wangjiang Road submarket: This emerging decentralised area benefits from a cluster of office and residential projects. Nearby residents have traditionally shopped at a pair of mass market shopping centres at the intersection of Wangjiang Road and Qianshan Road, but the recent opening of the mid-range Dreamport mall by China Resources is expected to draw traffic with its more comfortable shopping environment and wide selection of F&B options. Zhengwu New District submarket: This submarket corresponds with Hefei’s new CBD area, a once-rural area southwest of the city centre where numerous government buildings, office towers, and high-end residential projects have been built over the past few years. Shopping mall construction is ramping up as well; this is the only submarket in the city to run with more of the newer, large-scale projects. A total of five big malls will stand within a radius of a few kilometres in just a few years, creating intense competition. Swan Lake Wanda Plaza opened in 2012 and has benefited from a first-mover advantage, but others that have followed have experienced a slower ramp-up. More heavy hitters are on the way, including a mid-range Intime City and a branch of China Resources’ flagship MixC brand. It may take some time for the market here to absorb all of the new supply.

Hefei

Yintai Center (opened in 2013)

Cosmo City (opened in 2012)

Baohe Wanda Plaza (opened in 2010)

City Overview


Market outlook: Much of Hefei’s current retail stock consists of department stores and mid-size shopping centres serving the local shopping needs of mature residential communities. A handful of projects in core submarkets have led the charge in cultivating a local appetite for modern shopping malls and fast fashion. Though fast fashion brands have a limited presence in the city relative to other provincial capitals, new high-quality shopping malls – particularly those in emerging areas like Zhengwu New District – are destined to introduce fast fashion to a wider range of residents as well as raise the city’s overall retail profile. Currently under construction, the city’s metro network will facilitate movement to and within submarkets, and boost foot traffic at well-connected projects. Strong-performing malls in the core areas such as Intime Center and Cosmo City are expected to remain among the top shopping destinations for the city’s middle-class, while new malls in Zhengwu New District compete fiercely for customers in that submarket and beyond. As local residents see their incomes rise, shoppers are expected to consume more and demand better and increasingly diverse brands, creating opportunities for new market entrants. Hefei’s disposable income per capita is forecast to nearly double from RMB 28,000 in 2013 by 2020.

Key Indicators Hefei China 30 Ranking







Si Pai Lou

Ma’anshan Road

Zhengwu New District

San Li An

Huangshan Rd & Wangjiang Rd



The capital of Shandong province, Jinan is an administrative, political, and cultural centre with a strong government and military presence. The city’s private sector is also increasingly robust, with a large and flourishing software industry. Rising incomes are boosting retail demand, but most local consumers remain relatively price-sensitive compared to those in Shandong’s more dynamic coastal cities, Qingdao and Yantai. As a result, Jinan’s retail market tends to be more focused on the mass market and mid-range markets, although it retains a core of high-end offerings. Fast fashion brands have been slower to expand in the city than in comparable nearby markets, partly a result of modern shopping centres being outnumbered by traditional department store formats. A large amount of shopping mall floor space is set to enter the market over the medium-term, however, and this will create opportunities for fast fashion tenants and other brands.

Quancheng Road submarket: The most mature submarket in Jinan, this area contains a downtown cluster of office, retail and high-end hotel properties, as well as the city’s largest concentration of luxury retail projects. Most luxury brands are concentrated in upscale department stores InZone and Guihe Plaza. Parc 66 by Hang Lung is also in this submarket. Given the area’s large population of white-collar workers and provincial government employees, most malls and department stores here are busiest in the after-work hours. Well-to-do young adults and students contribute to foot traffic, while tourists visiting nearby scenic sites also spill over into this submarket. The newly opened Shimao International Plaza has become the final large-scale project to enter the congested area, with no new retail properties planned for the submarket over the medium-term. Considered by many the city’s “first real modern shopping mall,” Shimao has catered to consumers by offering free Wifi and introducing the first Shandong stores of mid-range fast fashion speciality brands like Monki, UR and Chocoolate.Daguanyuan submarket: With just one prime retail project, this traditional commercial zone dates back to the 1930s and continues to enjoy a strong reputation among local residents. The area’s Wanda Plaza attracts young people and students with a range of brands from the Inditex group. Older, low-end projects like Zhenhua Department Store are repositioning themselves to reverse their poor market performance, take advantage of their coveted locations, and tap into a younger generation of more active consumers.

Hero Mountain submarket: Several projects in this submarket are scattered throughout the area, and the lack of a central shopping destination has made it difficult for the submarket to generate heavy footfall. This area’s clientele consists of residents who live close to the projects where they shop. This area contains three InZone properties, which are locally developed shopping centres that combine supermarkets with modest-scale retail offerings. The Bayi Department store is favoured by the military and related personnel, though it and other department stores have been affected by the central government’s anti-corruption crackdown, which includes curtailing the use of official gift cards that provide the stores with much of their business.Honglou submarket: In the east of the city, this submarket is very popular among students due to its close proximity to Shandong University. An InZone project targets the young shoppers with mass market local brands as well as a selection of mid-market fashion brands like Only and Vera Moda. The locally developed future project Julong Plaza is highly anticipated by retailers interested in entering the project to take advantage of high nearby foot traffic.

Jinan

Guihe Plaza (opened in 2013)

Parc 66 (opened in 2011)

InZone (opened in 1996)

City Overview

Olympic Centre


Market Outlook: Future supply will be limited in Jinan’s crowded core submarkets, but many projects are expected for the city’s decentralised and suburban areas. Urban shopping mall space is expected to double over the medium-term, while urban department store stock is only expected to grow at about half that pace. Much of Jinan’s consumer potential derives from government and military employees, though private software sector workers are making gains and should help to balance an expected moderation in official demand owing to the national anti-corruption campaign. Jinan’s educated middle-class has warmed to new shopping malls, though department stores will continue to see business from a loyal base of middle-aged and older local residents. Government plans to prioritize development in the Olympic Centre and Western Railway Station submarkets will boost the prospects for retail developments there. Many mixed-use buildings with retail space are expected to open in these areas over the next few years. Jinan’s southern suburbs are also rising as a future submarket for retail. Many high-end residential complexes and villas are built or under construction there, and wealthy residents are drawn by the area’s attractive mountain views.

Key Indicators Jinan China 30 Ranking







Quancheng Road

Daguanyuan

Hero Mountain

Honglou



The capital of southwest Yunnan province, once-isolated Kunming is now benefiting from its growing status as China’s transport and commercial gateway to Southeast Asia. Unlike many other Tier 3 cities, Kunming’s retail market is balanced fairly evenly between department stores and shopping malls. The modern mall format is expected to take centre stage in the future, as new large-scale shopping centres help total shopping mall floor space to exceed that of traditional department stores. Kunming has completed the construction of two metro lines linking its main retail submarkets together, which is expected to boost foot traffic at connected projects. As local residents’ incomes rise alongside the city’s developing metro network to feature a total of six lines in the future, more consumers will be encouraged to visit a greater number of properties more frequently. Kunming may still have the feel of a frontier outpost now, but rising consumption and increasingly high-standard retail stock are expected to help it become a destination for more and more brands.

City Centre submarket: The most mature retail precinct with the greatest concentration of projects, this downtown area has a citywide catchment and sees the heaviest daily footfall. The most established projects here are Brilliant Plaza and the iconic Kunming Department Store, which continues to enjoy a strong reputation among long-time residents. Shuncheng Shopping Mall and New World Sino Bright round out the cluster to form the busiest retail destination in the city. Nearby, another small cluster of prime retail projects including New Southwest Mall, IWE and Golden Eagle form the city’s main destination for high-end brands. Also in the City Centre submarket, Ginkgo is Kunming’s most upscale property and carries the city’s highest-positioned luxury brand – Louis Vuitton. The most notable future project in the area is Spring City 66, developed by Hang Lung, the only foreign developer in Kunming’s market. Not far away, Roswell Power Centre Phase I will be delivered in an ultra-large mall format. This submarket continues to perform strongly, though newer projects are putting pressure on aging properties to update their tenant mixes to stay competitive. Beishi submarket: Northeast of City Centre, this emerging business area has a number of mature mid to high-end residential clusters and is home to many white collar-workers and middle-class consumers with high consumption power. Though retail offerings here were traditionally limited, recent additions are increasingly satisfying local demand. Gingko has another department store branch with luxury offerings on the first floor. VC.PARK benefits from the recently completed Metro Line 2 and attracts shoppers with fast fashion brands like H&M and Uniqlo. The new City Walking shopping mall targets the more affluent crowd with brands like Gap and Sephora, and an IMAX.

Majie submarket: Zhengda International is the only prime retail project in the area; it is a smaller department store anchored by a supermarket and caters to nearby residents. This area is home to several old residential clusters with aging, low-quality buildings, and as such, the city government has earmarked much of it for redevelopment. Four new large-scale projects are planned to enter the market as part of plans to improve the area. Majie Mall City and Twin City Phase I are notable upcoming projects. Most of the future retail supply here will arrive as sections of larger mixed-use projects and will house some relocated residents from the redeveloped neighbourhoods. Many retail projects here target the mass market and mid-range positioning, in line with local residents’ demand. Nanhuan submarket: Positioned as Kunming’s new CBD, this submarket contains the new headquarters of the provincial government; the arrival has prompted the development of several office, residential and retail projects. Top City of South Asia Folklore is the best-performing project here. Fast fashion tenants like H&M and Uniqlo are popular and strong tenant mixes for the mid-range market help to draw some 30,000 daily visitors, many of whom come from the area’s mature residential compounds and government buildings. Wanda is preparing to open its 100th project in China here, which will include a 300-metre-tall tower intended to become a local landmark. The project’s retail portion will be built to the company’s highest standards and complemented by numerous towers of residential and Grade A office as well as hotel space. Brands will include both typical Wanda offerings as well as select higher-end labels. Several other future projects are slated to enter Nanhuan over the medium-term and are expected to relieve the area’s current limited supply. Eastward expansion in the submarket remains in the early stages, though a few future projects here will expand catchments in the area.

Kunming

Top City of South Asia Folklore (opened in 2011)

Shuncheng Shopping Mall (opened in 2009)

Golden Eagle International Shopping Center (opened in 2007)

City Overview

City Centre


Market Outlook: Dominated by local and domestic developers, Kunming’s market is expecting a major supply boom that will triple its urban retail stock in the next few years. A majority of the city’s existing projects are concentrated in the core of the city, but the urban area is quickly extending outwards – and a high proportion of future projects will be in newer areas where retail properties are currently lacking or non-existent. Nanhuan is set to receive a large share of new malls. Another area to watch is Chenggong New City, a designated new CBD that is emerging some 40 kilometres from the city centre. Though it currently has no modern retail space, a large wave of shopping centres will rise in the area over the next few years, making it one of Kunming’s more well-covered submarkets. Considering Kunming’s large amount of upcoming supply, it may take some time for the market to absorb all of the new stock, although rising local incomes and a maturing local consumer culture will help prevent ramp-up periods for new malls from extending for too long. As China’s portal to Southeast Asia, Kunming will also benefit from improving connections and foreign trade with the region, which will further support the city’s economy and overall retail market.

Key Indicators Kunming China 30 Ranking







City Centre

Beishi

Nanhuan

Majie



One of the great ancient capitals of China, the capital of Jiangsu province has experienced strong population growth and rapid urban development, underpinning the steady rise of retail sophistication in the city. Nanjing is currently undergoing a transition away from its focus on one submarket – Xinjiekou – towards a multi-centred structure as new submarkets take on greater importance. The city’s shopping centres are more often locally developed than in surrounding cities, but are of high quality. As members of the city’s mushrooming skilled labour force become richer, local residents are finding more money in their pockets. However, getting the savings-oriented population to part with it in exchange for consumer goods is not easy. Nanjing was just outside the top ten cities for retail sales nationally in 2013, but the city has a strong presence of international brands. Nanjing enjoys a strong skilled workforce with significant earnings potential as a result of the 38 institutions of higher learning spread throughout the city.

Xinjiekou submarket: Xinjiekou is the go-to destination for residents throughout Nanjing and forms a compact, dense city centre retail cluster at the intersection of Metro Lines 1 and 2. Xinjiekou is bustling by day and night and draws in local residents, students, as well as visitors from as far away as Anhui and northern Jiangsu who are prepared to spend. Deji Plaza is the landmark property in this area, and consists of a sprawling shopping mall complex built in two phases. Deji has the city’s largest selection of luxury brands as well as a rich offering of mid-market international brands. This high-rent property is a favourite among new entrants for the exposure it provides. Golden Eagle’s flagship department store is located in Xinjiekou, and its second phase will take on characteristics of a shopping mall. Suning, the Nanjing-based electronics retailer, is building a flagship shopping centre here. Given its home-court advantage, Suning will follow with two more developments in the Nanjing area in the coming years.Gulou submarket: Gulou has taken time to gain traction as a retail area. Key projects in this retail precinct are working to reposition themselves to reduce the emphasis on top-end luxury goods in the hopes of drawing more foot traffic. Franshion Group acquired Nanjing International Center and is renovating and repositioning the project to better match demand. Zifeng Plaza, the retail podium of Nanjing’s tallest office building, focuses on domestic high-end goods.Hexi submarket: Nanjing’s master-planned “new CBD” area is steadily taking shape some five kilometres southwest of Xinjiekou. This multi-function area will eventually contain a large residential and office population. Most retail projects are still under construction, but the current key landmark is Jianye Wanda, which boasts strong foot traffic. Two

high-end malls are set to open here in the future as developers rush to establish this area as an alternative to Xinjiekou. Nanjing World Trade Center, which will be operated by Deji, as well as a future Sun Hung Kai project, will be the area’s most prominent properties. Though few high-net worth individuals live here, several mid to high-end residential complexes will boost the consumer base. The area is also expected to receive a large influx of new residents in the years to come, which has prompted the planning of eight future shopping malls. All of the new supply is expected to create a very competitive market.Confucius Temple submarket: A key spot for tourists and just two metro stops south of Xinjiekou, this area is enjoying a growing critical mass of shopping centres to serve as an alternative to Xinjiekou for residents on the south side of Nanjing. Opened in 2008, Aqua City is the area’s key landmark property which pioneered fast fashion’s entry into Nanjing, giving it a favourable reputation citywide. Many young shoppers gravitate to Aqua City for the latest fashion trends. In an effort to build on this success, nearby Shopping Fun opened in 2013. The area will receive a further boost from a new Maoye department store to draw even more people to the area. In addition to the existing stop on Metro Line 1, Metro Lines 3 and 5 will soon connect this area.Zhujiang Road submarket: A traditional submarket with just two existing projects, Nanjing 1912 and G. City, this area is focused on mid-market shopping and entertainment as well as spill-over demand from nearby Xinjiekou. The 1912 complex is a “Xintiandi-style” dining and entertainment complex. Development in this area is limited and no future supply is planned. Situated between Gulou and Xinjiekou, this area is too small to be displayed on the map.

Nanjing

Wonder City (opened in 2012)

Aqua City (opened in 2008)

Deji Plaza (opened in 2005)

City Overview


Market Outlook: As the city’s retail scene matures, Nanjing is slated to double its urban shopping centre stock over the next few years. This will create expansion opportunities in the market. Though the city’s affluent Xinjiekou submarket may be on its last wave of new projects due to limited land supply, Xinjiekou is expected to remain a top destination. Decentralised retail areas such as Chengdong, where high-end residences are concentrated, show great potential. Suburban areas are starting to emerge as viable retail markets and, consequently, these locations will fuel much of the city’s future retail supply growth. Large-format regional malls will take further hold in areas such as Jiangning in the south of the city, and Pukou, north of the river. Despite Nanjing residents showing the lowest disposable incomes in the wealthy East China region, their living expenses are cheaper than those of their neighbours. Nanjing is projected to add 4.5 million shoppers to its consumer class by 2020.

Key Indicators Nanjing China 30 Ranking







Xinjiekou

Gulou

Hexi

Confucious Temple

Zhujiang Rd



Loudly buzzing under a cacophony of constant construction, this emerging East China Tier 3 city near the mouth of the Yangtze River in Jiangsu province is in the midst of a massive building boom that is set to redefine Nantong’s physical landscape in the years to come. The completion of the Suzhou-Nantong Bridge, which conveniently linked Nantong to the southern Yangtze River Delta by road in 2008, has catalysed the city’s growth. Nantong is seeing a series of new housing developments and retail projects, including large-scale shopping centres being built. Rising demand has pushed along Nantong’s retail sector at breakneck speeds; the city is projected to septuple its urban retail stock in floor space over the medium-term, though from a low base. More so than any other comparable Chinese city, the new supply, which is heavily weighted on mall projects, signifies enormous retail growth potential in the market.

Old Town submarket: Packed with typical department stores, this submarket features a busy pedestrian street and has become very crowded in recent years. Footfall from long-time residents is particularly heavy, as a majority of them are accustomed to shopping here. Dominant local developer Wenfeng Group operates the popular Wenfeng Great World Department Store, while Golden Eagle Department Store is also a crowd favourite. These department stores cater to very local tastes, with mostly domestic brands and very few international brands. There is a range of offerings here; from a strong mass market to a mid to high-end segment, and a jewellery and gold market, all of which help to drive foot traffic from a broad spectrum of shoppers. Space for retailers to enter the area remains difficult as projects are generally fully occupied, while there is a lack of space to build new projects. New Town submarket: Due to the congested nature of the Old Town submarket, development was pushed south to create New Town, where the municipal government relocated its offices about a decade ago to lead the charge. Also referred to as the CBD of the city, the area has since drawn many residential and office developments to be built in recent years, which were then followed by the construction of retail projects. Zhongnan City Shopping Mall is the most modern retail property; unlike the majority of projects in Nantong, it is a high quality building that is comparable to top shopping malls in China’s other second tier cities. Wenfeng Group’s latest project, City Square, a mixed-use project with retail, is set to complete imminently. Department stores in the area are upgrading by transforming their spaces to operate as a hybrid of their

traditional format and a shopping centre in order to stay relevant. Fast fashion is present here and appeals to a younger crowd. Harmony City is also expected to arrive very soon and will increase competition in the area. This submarket will see the bulk of its new supply come soon, though two future reasonably sized projects are still expected over the medium-term. City North submarket: This emerging submarket has recently developed a plethora of new mid to high-end residential projects. However, growth in this part of town is expected to be slower than New Town, given that the area is generally viewed by local residents as less desirable due to its northern location in the city. In contrast, Nantong’s more developed south enjoys a higher status due to the large presence of government officials who live in the area. Nantong Wanda Plaza will open soon as an important project for the submarket, while Vanke City Plaza and a MixC will add to the area’s retail supply; none of the projects are expected to be in direct competition with each other given their distance from one another. Nantong Economic and Technological Development Area (NETDA) submarket: Another emerging submarket, this area is known as a sparsely populated industrial park. Opened in 2010, Sinho 101 is the main project here. It has a multitude of F&B choices geared toward local tastes and does well on the weekends as nearby residents are without many better options in the community. The future Shimao Plaza will cater to those settling into the area’s newly built townhouses and is expected to improve the submarket’s selection of retail and F&B offerings.

Nantong

The City (opened in 2011)

Zhongnan City (opened in 2011)

Sinho 101 (opened in 2010)

City Overview


Market Outlook: One of China’s fastest-growing coastal cities, Nantong has a rapidly developing retail market with a huge urban supply pipeline. Much of this new supply, to be distributed almost exclusively in the New Town and City North submarkets, is expected to target the city’s mid-market, where demand is by far the strongest. As Nantong’s retail market develops on the heels of an influx of national developers, even the city’s more well-off shoppers will start forming the habit of buying more brands locally as they become available, cutting down on the number of shopping trips to Shanghai and other Yangtze River Delta cities with more sophisticated product selections. Due to Nantong’s rapid expansion, consumers from surrounding county-level cities will be more inclined to come to the city’s New Town as a closer and less costly alternative to the fashion offerings in the region’s larger cities. Local residents’ rising incomes will also help spur consumption growth in the market. By 2020, Nantong’s disposable income per capita will nearly double from RMB 31,000 in 2013.

Key Indicators Nantong China 30 Ranking







Old Town

New Town

City North

NETDA



A seaport city in northeast Zhejiang province, Ningbo is located some 220 kilometres southeast of Shanghai and sits on the edge of a constellation of wealthy Yangtze River Delta cities. The local economy is export-driven and has a large number of wealthy small business owners. Ningbo has a less developed retail landscape than many of its neighbours, but has seen an influx of modern shopping malls in the last several years. The city’s retail market is centred on Tianyi Square, the city’s main destination, but other alternative submarkets are starting to gain traction with consumers, especially Yinzhou. Shopping malls are now strategically positioned at the east, west, and south entry points to the city, to capture demand from the rising residential population on the outskirts of the city. Local incomes are high, but consumption behaviour is relatively conservative. Because of its export-heavy economy, Ningbo has traditionally been sensitive to export demand from its main trading partners in Europe and North America.

Tianyi Square submarket: As the most mature submarket in Ningbo, Tianyi Square has the highest foot traffic in the city and is the default destination of choice for all Ningbo residents. It is also a traditional retail area, which is largely department-store dominated. Many people continue to frequent these department stores as old habits are ingrained. But, as a rising number of consumers opt for malls and online retail, some department stores are seeing lower foot traffic and weak revenue growth. Even the once-popular Intime Department Store, which has four locations in Ningbo, has been affected. Heyi Avenue Shopping Mall, the only luxury mall in Ningbo, has also seen a decline in foot traffic. The submarket’s newest completion – Rosy Mall – has experienced a long ramp-up period. Yinzhou submarket: Wanda Plaza and InCity are the best all-around performers among Ningbo shopping malls. They have a strong selection of national brands and benefit from a large nearby residential population. These two mid-market properties attract heavy footfall and form the city’s second-largest submarket after Tianyi Square. Other projects in the area have not yet formed a strong following. In the coming years, this submarket will get a large surge of new supply.

Jiangbei submarket: Still considered a newer area, this retail precinct is at an earlier stage of maturity and is seeing steady increases in foot traffic. Wanda Plaza Jiangbei anchors the north end of this submarket in a rapidly emerging mass-market residential area. The southern end is defined by Raffles City, which has a strong mid-range offering. Jiangbei retail properties are expected to receive a boost from the future Metro Line 2. Jiangdong submarket: This area remains in the incubation phase. Jiangdong’s dense population and relatively limited retail supply are expected to benefit the area’s key properties. The newly opened Metro Line 1 will provide a boost in foot traffic. The submarket will be further aided by future Metro Lines 2 and 3. East New Town submarket: This is the “new CBD” area of Ningbo, a master planned zone with a multitude of new projects. The resident population is still relatively small in East New Town and several retail projects have delayed openings. A huge number of office buildings and high-profile retail projects are slated for the submarket over the next few years. This area has long-term potential.

Ningbo

Raffles City (opened in 2012)

Heyi Avenue (opened in 2009)

Yinzhou Wanda (opened in 2006)

City Overview


Market Outlook: Though the newer retail areas have yet to draw people away from the traditional charm of Tianyi Square en-masse, decentralised alternatives will catch on and are expected to be able to sustain steady growth. With the city expected to more than triple its retail floor space over the next few years, younger submarkets such as Jiangdong and Jiangbei risk a temporary period of oversupply. Also, a high concentration of new projects is in East New Town “new CBD” area, where demand will need to catch up to supply. Ningbo residents are often overlooked within eastern China as they are outshone by their more high-profile neighbours to the northwest: Hangzhou, Suzhou and Shanghai. Yet, the reality is that the disposable incomes of Ningbo residents and their propensity for spending are not far off from their wealthy, consumer savvy neighbours, especially taking into consideration their lower living costs. By 2020, just over half of Ningbo’s population will comprise the consumer class, only slightly behind Hangzhou, Suzhou and Shanghai. Given the relatively comfortable situation of local residents, Ningbo’s underestimated retail market holds much growth and developmental potential for the future.

Key Indicators Ningbo China 30 Ranking







Tianyi Square

Yinzhou

Jiangbei

Jiangdong

East New Town



Qingdao is known as a major tourist destination in North China, with millions of visitors flocking to its beaches and annual beer festival. A major seaport in East China, Qingdao has completed several impressive and large-scale infrastructure projects in recent years, including the world’s longest over-water bridge and China’s longest underwater tunnel; both have conveniently facilitated larger and quicker transfers of people and goods in and out of Qingdao, speeding up the city’s economic growth and development. Qingdao’s growth has benefitted the city’s retail market and given rise to a new era of consumerism. Local residents have noticeably shifted their shopping preferences towards shopping malls. Despite a relatively strong fast fashion presence in the city, Qingdao’s market is characterised by conservative spending patterns. This is leading landlords and retailers to look at how to unleash local residents’ full consumption potential.

Shinan East submarket: This area leads the city’s luxury market. It is also known as a popular tourist destination for visitors who are drawn to the waterfront area and the Olympic Center, especially during the summer season. Hisense Plaza, the sole luxury property in Qingdao, is a landmark, and a new phase on the way will further cement its leading position. Marina City caters to the tourist crowd with ample F&B and affordable fashion options. The future MixC will extend foot traffic further northward and will have a unique offering as the only large-scale high-quality mid-market project in Qingdao. The area will be served by Metro Lines 2 and 3.Shibei CBD submarket: Favoured as an up-and-coming precinct and located only a short distance from Shinan East, Shibei is a magnet for students and young adults and is a priority area under the local government’s urban development plan. The quickly maturing area will grow from a single Wanda Plaza to include multiple mixed-use projects over the long-term. Shinan West submarket: Within close proximity of Qingdao Railway Station and future Metro Lines 1, 2 and 3, this submarket is one of the oldest in the city. Formerly the city’s most prestigious shopping area, Shinan West has been rather lacklustre in recent years as projects have been slow to adapt to the evolving commercial market around them. Many department stores in the area have closed. Though it does well during the high-tourism season, Shinan West otherwise suffers from low foot traffic due to the absence of a major shopping destination. Redevelopment of the area is needed to return to its glory days of the past, but that task is stalled by limited land supply. Bucking the trend, however, Parkson department store continues to perform well here.

Taidong submarket: Qingdao’s most traditional retail precinct boasts the highest foot traffic in the city, better than that of Shinan East, despite having only two prime shopping centres, including a first-generation Wanda plaza. With a near ubiquity of low to mass market retail projects on popular pedestrian streets, the submarket is further bolstered by a night market and countless street-side shops, all of which are local crowd-pleasers, especially among residents who have been coming here since the dawn of the city’s commercial retail market in the 1980s. The best performer is Liqun Taidong Department Store, which is also one of the highest revenue-earners in the city. Laoshan submarket: A relatively new CBD, but older than Shibei submarket, the area is home to just two retail projects: the Leader Shopping Centre, saturated with local fashion brands; and its lesser rival, Zendai Plaza, which focuses on mainstream international brands, but is somewhat hindered by its location on the fringes of the submarket. The future Metro Line 2 is expected to help drive foot traffic. Licun submarket: The retail projects here benefit from a large amount of residential projects nearby, which drives demand from local residents. An old industrial base, Licun has formed a niche in the market despite the underdeveloped nature of the area. It benefitted early on from entrants like Wanda and Powerlong, with Dashang Group taking a role in leasing the latter. The recently opened Rock City mall is at the core of the retail area and boasts the highest concentration of fast fashion brands in the city with the Inditex brands, H&M, and C&A. At least three new mid-range projects will enter over the medium-term.

Qingdao

Licang Wanda Square (opened in 2012)

Zendai Plaza (opened in 2012)

Hisense Plaza – Olympics Store (opened in 2008)

City Overview


Market Outlook: Qingdao is going through a period of adjustment with department store closures being driven by aging properties, poor operations management and an influx of quality, new supply in the form of shopping centres. Many of the new centres are being constructed by experienced developers. Given the raised stakes at this stage, some developers will come under increased competitive pressure. Some may consider selling underperforming properties, or change course by converting retail space to other uses. Qingdao may receive a boost in the future as overseas Chinese or residents currently living in other cities across China look to Qingdao as a place to settle, given the city’s romantic seaside environment. Qingdao’s urban population is projected to increase by about a million people by 2020, up from 6.3 million people in 2013. Moneyed newcomers are expected to support long-term consumption growth in the city.

Key Indicators Qingdao China 30 Ranking







Shinan East

Shinan West

Taidong

Shibei CBD

Laoshan

Licun



Widely considered the most fashion-forward city in all of mainland China, Shanghai receives more international brands than anywhere else in the country and is number two in Asia after Hong Kong in retailer presence. Highly sought after by international retailers looking to enter or expand in the China market, Shanghai also benefits as a key market for domestic retailers seeking to broaden their customer base and gain exposure to larger domestic markets. As competition in the core areas of the city intensifies, landlords are getting more creative in their marketing strategies in order to differentiate their projects and boost foot traffic. With an artwork theme, K11 appeals to educated, middle-class shoppers, while Shanghai’s newest and largest mall, River Mall in Pudong New Area showcases fountain displays. Shanghai is also supported as China’s leading retail market through its impressive infrastructure network, which includes a comprehensive urban rail system that facilitates trade and transportation in and between key retail submarkets. All of this designates Shanghai an ideal place to accommodate multiple stores for almost any brand. Formerly merely a handful of centrally located retail streets, Shanghai’s retail landscape has vividly transformed over the span of two decades to feature numerous commercial shopping hubs and serve as a coveted destination for international fast fashion retailers’ global or Asia flagship stores.

Centralised Areas:East Nanjing Road submarket: The city’s oldest and most traditional retail area is best known for its pedestrian street, which draws a high volume of domestic and foreign tourists year-round. As the area continues to diversify with new shopping centres, retailers in this cluster win from superb visibility and high foot traffic. Crowds are drawn with help from a nearby metro hub and the city’s iconic Bund waterfront, renowned for its converted heritage buildings, which are now mostly used as F&B and entertainment venues though some boutique stores can still be found along this stretch. West Nanjing Road submarket: Shanghai’s highest-positioned retail precinct welcomes an international ensemble of luxury retailers in an upscale band of high-end malls: Plaza 66, CITIC Square, Jing’an Kerry Center, and Westgate Mall, in addition to a lively luxury high street. The area is now home to a growing set of flagship stores, as evidenced by the new Old Navy and Sephora flagships. Nearby metro lines help to further boost foot traffic in the area. Xujiahui submarket: Bustling and crowded at its core, this submarket is set at a crossroads for busy avenues and metro lines, generating huge amounts of foot traffic on both weekdays and weekends. This densely packed hub serves most customers in Shanghai’s southwest. Taking off in the 1990s, it has since developed into a popular mid-market destination for food, fashion and electronics. Major projects, such as the ever-popular Metro City and landmark Grand Gateway 66, are continually upgrading their tenant mixes to stay on top of market trends and make the most of limited space.

Shanghai

iapm (opened in 2013)

City Overview


Huaihai Road submarket: The submarket forms the second traditional retail precinct in the city after East Nanjing Road. The street successfully moved upscale with the revamping of two major malls that reopened as luxury malls a few years ago. Tourists flock to the popular Xintiandi project that is arguably China’s first flagship lifestyle centre development. The western stretch of Huaihai Road boasts several flagship stores for international brands and plenty of high street shops. Lujiazui submarket: The financial district of Shanghai and one of China’s original ‘new CBDs’ can be divided into halves; at the core is Little Lujiazui, and to the south lies New Commercial City, a growing mid-market commercial centre that caters to Pudong New Area residents. Retail in Little Lujiazui serves the dual function of a tourist destination and an amenity for thousands of financial sector workers in nearby office towers. Adjacent to the city’s pioneering mega-mall Super Brand Mall, one of Shanghai’s more recently added landmarks, ifc Mall, has done well to bring an assortment of luxury brands to the submarket and put Pudong New Area firmly on Shanghai’s map. Hongqiao submarket: Hongqiao is among Shanghai’s premier high-end residential hubs and also has a high concentration of Japanese, Taiwanese, and Korean expatriates. In the last four years its importance as an office cluster has surged following the expansion of Hongqiao International Airport, fuelling retail consumption demand. LVMH Group developed L’Avenue here, one of the very few decentralised luxury malls in China, and was soon followed by Takashimaya, a mid to high-end Japanese department store. The future supply pipeline for the area is large and includes imminent completions of The Place and The Arch. In the nearby Zhongshan Park area, CapitaLand is building Shanghai’s second Raffles City, on the heels of Changning Cloud Nine mall’s success, which has steadily matured in the last seven years.

Global Harbour (opened in 2013)


Grand Gateway 66 (opened in 1999)Super Brand Mall (opened in 2002)

Shanghai ifc Mall (opened in 2010)

Decentralised Areas:Decentralised Puxi submarket: A large volume of future supply is expected in this submarket, with a high concentration of projects to be delivered in Putuo, Minhang, and Zhabei districts. With many experienced developers hoping to appeal to local residents and lead the charge on community-based shopping in the mid-range segment here, the retail precincts are expected to feature more F&B options than other projects. In the coming years, MixC and Longfor Paradise Walk will open in Minhang district, while Putuo district will host the highly anticipated Hutchison Whampoa Upper West development. In the city’s north, nestled amongst Shanghai’s elite universities, Wujiaochang has traditionally had a distinct student character as well as a huge working-class population. In recent years, the development of New Jiangwan City, a high-end residential cluster, is raising the profile of this area. Tishman’s proposed mixed-use property is highly anticipated and is expected to draw heavy foot traffic from students and local residents.

Decentralised Pudong New Area submarket: Although Pudong has developed quickly and population growth has been rapid, the district is still under-provisioned with retail relative to Puxi. The Lianyang and Jinqiao areas are relatively more high-end and favourable for lifestyle-oriented brands. Conversely, the Sanlin area is less affluent and more mass market-oriented. Key upcoming projects include a Japanese-developed LaLaport mall and a Vanke project, which will fill unmet retail demand in Pudong New Area given the tremendous population growth that has occurred east of the river in recent years. The long-awaited and highly anticipated opening of Disneyland at end-2015 is further expected to attract crowds to Pudong New Area and increase overall foot traffic. Daytrip visitors will be a boost to retail properties near the Disney park.

Centralised Areas


Key Indicators Shanghai China 30 Ranking







West Nanjing Rd

Lujiazui

Huaihai Rd

East Nanjing Rd

Xujiahui

Hongqiao

Decentralised Puxi

Decentralised Pudong


Market Outlook: Despite the mature nature of the Shanghai retail market, total retail floor space is set to undergo several years of rapid growth, with the bulk of supply to be concentrated between the inner and outer ring roads. International brand presence will take off in emerg-ing precincts such as the North Bund. Great confidence in the future of China’s largest retail market is affirmed by a number of high profile future projects throughout the city. Shanghai will see rising retail property sophistication. Whether it be via the magic of Disney, innovative artistic displays, or unique design features, the trend-setting city could ultimately transform the way people consume fashion, F&B and entertainment. The city will further enjoy rising disposable incomes, though residents will show discerning taste in how to spend their money given the plethora of brands available. Among the most privileged people in the country, Shanghai residents will see their disposable incomes increase some 75 per cent by 2020, when well over half of the city’s population will belong to the consumer class.


Shenyang is the hub city for Northeast China and is a major centre for heavy industry that is undergoing economic revitalization and diversification. The city serves as the premier shopping destination for a wide catchment area that includes many small cities across Liaoning province that are too small to have many shopping choices of their own. A large number of new shopping centres have been built in a short period of time, leading to intense competition between projects while demand catches up. Compared to other similarly sized cities, Shenyang has a relatively high concentration of luxury malls. Shenyang’s retail market is banking on perpetually improving economic conditions and a growing middle-class to boost demand for premium brands. Within the urban areas of the city, new residential construction projects can be found in relatively central locations, giving rise to a growing population base of high-income residents.

Taiyuan Street submarket: One of two traditional retail precincts in Shenyang’s core, Taiyuan Street has a strong mix of department stores and shopping centres serving the mid to high-end market, including Zhongxing Shenyang Commercial Building, the sole luxury project in the submarket. The submarket also contains one of the four strong-performing Wanda malls in the city. The area also offers numerous F&B options, which helps to drive heavy footfall and entice younger crowds. Strong transit links via Metro Line 1 and the railway station make this submarket conveniently accessible city-wide. The city’s fifth and newest Happy Family, a successful locally operated department store chain in Shenyang, is coming soon and is expected to add to the general appeal of the submarket. Zhongjie submarket: As Shenyang’s second traditional shopping precinct, Zhongjie consists of a long pedestrianized street that enjoys strong foot traffic at all hours of the day. The area has developed more high-profile projects compared to Taiyuan Street, such as the city’s first and most popular Happy Family Department Store, Joy City, and Hang Lung Palace 66. The latter is one of two Hang Lung projects in the city, and may be considered submarket’s best project. Joy City has established a rich selection of restaurants that pull in customers every day at mealtime.CBD submarket: This area has the city’s highest concentration of office workers. In the last few years, the CBD has developed into a mid to high-end retail market. Two of the city’s five luxury projects are here, including Shenyang’s most recent luxury mall, Hang Lung Forum 66 and Charter Shopping Centre. Charter Shopping Centre continues to draw larger crowds, but both luxury malls compete for different customers with different brands.

Tiexi submarket: This area has a low to mid-market positioning and serves from the needs of local residents. Star Mall and Wanda are the largest malls in this area and are surrounded by a dense, mature population base.Hunnan submarket: Hunnan has a similar setup to Tiexi submarket in that it also has a Wanda mall and its customer base almost exclusively comprises of nearby residents seeking F&B and activities, as well as moderately priced goods. The area further benefits from a connection to Metro Line 2. Mid-Golden Corridor submarket: Just south of the luxury-infused CBD submarket, this area is at the centre of the commercial corridor developed by the local government started over a decade ago and extends along a boulevard running from north to south. The area serves the mid to high-end market with an emphasis on luxury. The submarket’s landmark, MixC, is one of the most successful malls in Shenyang and boasts the city’s largest Louis Vuitton store. Two massive mid to high-end projects are slated for the future and will enhance the gravitational pull of this submarket. North-Golden Corridor submarket: This area does not experience as much congestion as the more southern portions of the corridor, giving properties here convenient accessibility. The biggest landmarks are the F&B and leisure-oriented Shenyang Tiandi, and the new Shenyang Lotte World Department Store.

Shenyang

The MixC (opened in 2011)

Hang Lung Palace 66 (opened in 2010)

Joy City (opened in 2009)

City Overview

Mid-Golden Corridor

North-Golden Corridor


Market Outlook: Shenyang’s status as a regional hub for Northeast China is expected to remain uncontested. As the city continues to benefit from its diversifying economy and rising incomes, demand for retail will catch up to supply. Shenyang’s consumer class will swell in the coming years and is predicted to more than double in size to create 1.5 million-plus new shoppers for the market. Given that Shenyang continues to record above-average vacancy rates at its retail projects in comparison with other cities in China, retailers will have no trouble finding space for expansion within existing properties; rental growth will be slower than most cities on the mainland, giving tenants strong bargaining power. Shenyang will receive relatively less new supply than most mainland cities of its size. New retail developments will tend to be in the shopping centre format rather than department store format.

Key Indicators Shenyang China 30 Ranking







CBD

Mid-Golden Corridor

Taiyuan Street

Zhongjie

Tiexi

North-Golden Corridor

Hunnan



Across the border from Hong Kong and a major destination for domestic population migration, Shenzhen has come into something of its own retail right in recent years. Blue-collar and white-collar workers with rising incomes comprise a growing demographic of young, brand-sensitive consumers who enjoy the ability to flaunt their newfound riches through what they wear. This generation of consumers helped push up Shenzhen to number six in China for total retail spending. Given that a brand-centric mentality remains generally strong in Shenzhen, many international retailers continue to choose this city as their entry point into the South China market. Local residents are expected to show greater enthusiasm for fast fashion and will have the funds to back their favourite brands as their disposable incomes are forecast to nearly double from RMB 44,600 in 2013 by 2020.

Futian submarket: Located in the city’s new CBD and surrounded by high density mid-market to high-end residential buildings, young shoppers and white-collar workers from nearby offices represent the key consumers in this area. The area enjoys access to four of the five existing metro lines in the city. Shopping malls with mid-range and fast fashion retailers and a wide selection of F&B outlets tend to thrive in this area, which has one of the city’s fastest-growing populations. Future land supply in this submarket is limited, but Wongtee IA Mall and an East Pacific International Centre will enter as mid-range to high-end establishments. Several department store projects have undergone renovation to re-enter the market with a shopping centre format, as the move away from the traditional department store format continues.Luohu submarket: Serving as the city’s traditional CBD, this submarket has developed as the most mature retail precinct and is home to many international retailers. Favourites among local residents are King Glory and the MixC, considered the best mid-range to high-end shopping destinations in the city. The latter has done well to introduce a wide range of luxury brands to the city, and offers a premium selection that no other retail project has since been able to top. This area benefits from close proximity to the Hong Kong border checkpoint, which results in a large flow of travellers passing through the submarket every day. However, a lack of available land will restrict future development.

Nanshan submarket: An emerging retail market in the fastest-growing area of the city, the submarket is expected to see population growth of over 50 per cent in the next 10 years. Built around a cluster of luxury housing, the area’s consumers are likely to favour the upmarket and are expected to fuel demand at nearby retail projects. Compared to the dominating presence of traditional high streets and department stores, there are few shopping malls in Nanshan. But, the submarket is a focus of government redevelopment aimed at modernizing the area, and as a result, the submarket is slated to receive more new supply than any other area of the city in the future. Coming projects include OCT Plaza and a Raffles City. Bao’an submarket: This emerging area on the edge of the city is home to numerous mass market residential clusters and old industrial areas. The submarket is in the process of being revamped as the area develops. Haiya Mega Mall opened as the city’s largest shopping mall here in 2013, tapping into unmet demand for shopping mall space. Rainbow Shopping Mall also reopened in the same year, after converting from a department store to a shopping mall. Longgang submarket: Away from the city centre, this submarket is a former industrial base undergoing redevelopment. This emerging area is currently home to two relatively new retail projects serving the mid-range market: COCO Park and Vanke Plaza. With more development in the pipeline, this area is on the way to becoming an important decentralised retail hub for the northern area of Shenzhen.

Shenzhen

Longgang COCO Park (opened in 2012)

KK Mall (opened in 2010)

The MixC Phase I (opened in 2004)

City Overview


Market Outlook: Further diversification within Shenzhen’s submarkets is expected to entice consumers as younger shoppers mature and refine their tastes to become more selective, demanding a wider range of goods from the mass, mid-range and high-end markets. This will fuel demand for a more varied retailer presence. More international retailers are likely to enter the Futian submarket in the coming years, given the considerable amount of new supply slated for the area. Continued expansion of the urban rail network will enhance accessibility of key retail clusters. Given the tight space in the city centre, new areas lacking shopping malls will see a strong handful of local developers actively pursuing projects in these young submarkets. Longhua district, which formally broke off from Bao’an at the end of 2011, is expected to form a dedicated retail precinct in the future; an outlet mall and a high-end project are slated to enter over the medium-term. Local consumers are likely to be more selective in their purchases, but eager to chase fast fashion offerings in the market as such brands present a mix of value and relative status. The growing trend of F&B is expected to continue, with consumers choosing to allot more of their spending money to affordable dining options.

Key Indicators Shenzhen China 30 Ranking







Nanshan

Luohu

Futian

Bao'an

Longgang



Located just 90 kilometres west of Shanghai, Suzhou has a dynamic private-sector economy that has received decades of investment in high-technology manufacturing. It is an integral piece of the Yangtze River Delta economic mega-region and is the industrialized neighbour of Shanghai. Over the past decade, Suzhou’s retail market has expanded from a small cluster of department stores in Old Town to a multi-centred city with many distinct submarkets. Recognized as a leading tourist destination, tourists are a boon for the city’s retail sales. Suzhou comes in at ninth place among the nation’s top ten cities in terms of retail sales. However, it is important to point out that most statistics about Suzhou are bolstered by the fact that its borders extend across a vast area that include a constellation of wealthy satellite cities. Suzhou’s massive and developing Suzhou Industrial Park, which is the city’s largest master-planned area, holds much promise for the future and is a key area to watch.

Old Town and Shilu submarket: This is the most traditional retail area and is located in the heart of the city. Dominated by low-rise department stores – as the local government works to preserve an authentic skyline here – this area contains two pedestrian streets. Both streets generate high foot traffic from a wide range of consumers across the entire city. This area is steadily introducing more fast fashion brands to shoppers. Apart from the mainstream fast fashion brands such as H&M and GAP, M&S established its first Suzhou store here in 2013. Not far away, Matro Department Store carries luxury brands on its first two floors. Meanwhile, Shilu area is generally more low-end, with Victory Plaza mall attracting large crowds. Nanmen submarket: At the south entrance to the city, this area has upgraded from a mass market into a mid-to-high-end shopping area, but contains a limited number of properties. The main attraction here is the two-building Suzhou Tower. Wuzhong submarket: On the southern outskirts of town, this submarket has developed more independently than industrial park submarkets SIP and SND, which are largely government-planned. Crowds are increasingly frequenting the newly opened suburban retail project Aeon Mall Wuzhong. A Wanda Plaza is also on the way.

SND submarket: In the city’s west end, Suzhou New District has a small retail cluster that serves local residents. The two main landmarks are Izumiya Department Store and Sunshine Department Store. The city’s theme park is located here, and local tourism pushes up foot traffic.Pingjiang New City submarket: Surrounded by mostly lower-income residents, this submarket is in the city’s north near one of Suzhou’s three railway stations. This submarket is centred around a Wanda Plaza,which performs less strongly than most Wanda properties. Over the medium-term, four smaller mall projects are slated to open in this area. SIP submarket: Suzhou Industrial Park is the largest submarket in Suzhou and is considered to have high potential. Conveniently located on the way to neighbouring Kunshan and Shanghai, SIP has access to a wide population of wealthy residents, who are expected to contribute to demand as they choose to shop in less-crowded Suzhou rather than drive to Shanghai. SIP also boasts InCity, which gave Suzhou its very first shopping mall in 2010. Surrounded by a huge cluster of residential projects in a middle-class neighbourhood, this mall is the submarket’s best retail property and is starting to upgrade and introduce more premium brands such as Hollister and Kiehl’s. Near Suzhou University, the open-air Vanke Midtown that opened at end-2013 also does well to support surrounding students and residents. The submarket is headed into a supply boom; a dozen future projects are opening here over the medium-term.

Suzhou

Phoenix International Bookstore (opened in 2014)

Vanke Midtown (opened in 2014)

Harmony City (opened in 2008)

City Overview

SIP West

Shilu Old Town

SIP East


Market Outlook: The number of new retail properties entering the Suzhou market in the coming years is more than most cities in China. Over the medium-term, the city’s shopping centre floor space is projected to more than double. Much of this growth will be in the outer edges of the city, particularly in the SIP and SND submarkets. In SIP, there is a distinct move away from the traditional department store format, which still characterizes the rest of the city’s retail scene. Much of the demand for the new shopping mall supply will be driven by residents who will populate the high-end residential projects mushrooming in the area. Retailers looking to enter or expand in the Suzhou will find space here. Maturing projects in the central areas, meanwhile, will largely maintain their positions. Like much of China, retail demand will continue to be driven by the rising middle-class. Suzhou’s consumer class is projected to account for more than half of the city’s population by 2020.

Key Indicators Suzhou China 30 Ranking







SIP East

Old Town

Nanmen

SIP West

SND

Wuzhong

Shilu

Pingjiang New City



Leading the pack of “Tier 1.5” cities in China and one of just four provincial-level municipalities on the mainland, Tianjin has an enormous economic base that is on track to closing the gap with Guangzhou and Shenzhen. At the heart of Bohai Economic Rim, Beijing’s south-eastern neighbour boasts a maturing retail market with a healthily expanding shopping mall sector that has greatly expanded in the last three years. High-speed rail connectivity to Beijing within 35 minutes has catalysed the growth of what is now being dubbed as a Beijing-Tianjin-Hebei economic mega-region. By way of retail spending, Tianjin ranked fifth in China in 2013, when shoppers spent RMB 447 billion in the city. Rising incomes, changing consumer patterns and a surge in the construction of new supply in recent years have also helped to enhance Tianjin’s wider market appeal; the city is repeatedly chosen among fast fashion retailers as a priority destination for brand expansion in China.

Old Town submarket: A heavily gentrified pocket of Tianjin, this submarket, which was considered low-end just a few years ago, has evolved into more of a mid-range market with a touch of the upscale, as seen in Yanlord Riverside Plaza. COFCO’s Joy City is the main landmark, given its strong F&B and entertainment offer, and is probably the busiest mall in Tianjin due to its popularity with the younger crowds who fill it on weekends. Future projects by high profile developers will solidify Old Town’s transformation into a major submarket. Youyi Road submarket: With Metro Lines 5 and 6 to connect the southern area of Tianjin in the future, the city’s most luxurious market is likely to see foot traffic rise to strengthen its market-leading position. The submarket features a broad avenue with the city’s highest-grossing department store, Youyi Department Store, and is also credited with introducing most of the city’s luxury brands. Galaxy International Shopping Center opened in 2012 and has done well to make newer high-end brands like Miu Miu and Balenciaga accessible to the city’s shoppers. The relatively new iShine City does well to attract local residents. Binjiang Avenue submarket: With one of the lengthiest pedestrian streets in China, this submarket, which is considered low-to-mid-range, has the advantage of strong foot traffic on weekdays and weekends. Though heavily crowded with department stores and street-side shops, the area is currently undergoing redevelopment, which is expected to help it draw even bigger crowds upon completion. Space is limited here, and as such, new construction will be constrained.

Heping Avenue submarket: Tianjin’s competing traditional pedestrian street will get a boost in foot traffic after the new Metro Line 4 is completed. Previously dominated by pedestrian-street mainstays, the newly-opened Riverside 66 provided a huge boost to the profile of this area, bringing in a much richer selection of international brands.Xiaobailou submarket: With access to Metro Line 1, this area has the distinct advantage of being centrally located. But, incorrectly positioned properties have led to a relative decline in the area’s popularity in recent years, and as a result, foot traffic has fallen. However, the well-received high-end Hisense Plaza is an important exception here, as the quality project attracts a steady group of shoppers. Nanjing Road submarket: Adjacent to the Xiaobailou submarket, this established area also benefits from close proximity to office buildings and offers a diverse mix of brands, drawing shoppers looking for a more varied selection. Popular among white-collar workers in the area and conveniently located along Metro Line 1, Nanjing Road is expected to receive a further boost from the new Metropolitan Plaza development.

Tianjin

Galaxy International Shopping Center (opened in 2012)

iShine City (opened in 2012)

Joy City (opened in 2012)

City Overview


Market Outlook: Though no dramatic changes will be made to Tianjin’s maturing retail landscape in the near future, there will be plenty of activity on the horizon as the city continues to modernize its retail industry and adopt a more international outlook. Consumer spending habits are rapidly shifting in favour shopping malls, which are convenient and easily accessed by car. Total floor space of malls will increase more than 80 per cent over the mid-term. But the era of department stores is not yet over in Tianjin – total floor space of department stores will increase by about 50 per cent over the same period. The trend of reputable developers creating landmark shopping centres is likely to continue and bring the market into a new era of sophistication. With help from greater disposable incomes, consumers will refine their tastes and preferences to drive consumption growth and create more opportunities in the market for retailers. Tianjin is also a large market that can typically support multiple stores. Fast fashion is expected to continue to thrive as the middle-class contnues to grow; some 50 per cent of the city’s population is expected to make up Tianjin’s consumer class by 2020. New policies to drive coordinated development among Beijing, Tianjin, and surrounding cities are expected to be a boost to the city’s economic development. The build-out of infrastructure, such as the future Tianjin-Baoding high-speed rail line to connect Tianjin and West China – and serve as the final high-speed rail link for Tianjin – is further expected to improve transport and transit efficiencies within the region. All of this bodes well in facilitating the city’s retail sector.

Key Indicators Tianjin China 30 Ranking







Youyi Rd

Nanjing Rd

Xiaobailou

Old Town Area

Binjiang Avenue

Heping Rd



A hundred years ago, the inland metropolis of Wuhan stood alongside Beijing, Shanghai and Guangzhou as one of China’s leading cities. Wuhan fell behind in the second half of the twentieth century as the modernising coastal provinces powered ahead of the interior, but now the city is experiencing a renaissance that promises to help it regain some of its earlier prominence. Wuhan was originally formed through the unification of three independent towns: Hankou, Wuchang and Hanyang. As Wuhan ascends as a regional hub for Central China, it continues to ride out a massive infrastructure boom. Considerable even by China standards, the build-out has helped to bring residents together and fuel the growth of retail hubs that pull in consumers from across Hubei province. With one of the largest concentrations of university students in China, the eastern sub-city of Wuchang represents a strong source of consumers who are quick to adopt new brands and trends. Wuhan’s workforce is one of China’s best-educated yet low cost. The city’s disposable income growth is propelled by rising wages in core industries, such as automotive production, for which the city is well known, as well as its steady diversification into the service sector industry.

Jiefang Road submarket: Featuring a mature department store street with a trade area that encompasses all of the three sub-cities of Wuhan, the submarket is a popular retail destination and sees heavy footfall. Jiefang Road is lined with properties owned by the local Wushang Group. The area has been aggressively upgrading since the more recent addition of Wuhan International Plaza, which serves as the only large-scale luxury shopping mall in the city. The area is bolstered by Metro Line 1 and will further benefit from future Metro Lines 6 and 7.Jianghan Road submarket: With bold claims to be among the most famous pedestrian streets in all of China, this submarket benefits from the highest foot traffic in the city, though it is less crowded than several years ago. This street, which runs through the old city centre of Hankou, has been slow to meet the changing preferences of increasingly wealthy shoppers. Many people, particularly those residing north of the Yangtze River in Wuhan, are showing less interest in the market’s lower-end positioning, especially given the rise of the Qingnian Road and Jianshe Avenue submarkets, which have stronger mid-market offerings. Qingnian Road and Jianshe Avenue submarket: A cluster of projects in this submarket are located near Wuhan’s rapidly growing central business district. But despite strong potential demand from nearby office workers – with eight buildings opened in the span of less than two years – the retail in this area has yet to reach its full potential. Wanda Plaza Lingjiaohu and New World Department Store are the main landmarks. The mid-to-high-end Oceanwide City Square is the newest landmark property in this area. Wangjiadun CBD is expected to gradually break off and form its own submarket.

Wangjiawan submarket: As more people choose to reside here, Wangjiawan is prospering and is becoming the best performing retail area within the Hanyang sub-city. Abundant land supply has triggered new developments. Meanwhile, retailers see potential from the rising population. Renxing World Center is the latest landmark in this area, soon to be joined by JoyGo. Jiedaokou submarket: Frequented by students from rich families and consumers with a predilection for fine brands, this area has transformed in the last 10 years from a popular electronics market to a mid to high-end retail market. The change has been so great that that many consumers now prefer this shopping location over the traditional nearby retail precinct, Zhongnan. Jiedaokou’s offering of affordable luxury is a strong draw. InTime Department Store is the retail precinct’s newest project.Guanggu submarket: Students in the heart of Wuchang’s university area enjoy an evening stroll in Guanggu, characterized by a massive pedestrian street-style shopping centre that has been expanding in phases since 2008 and does well to draw high foot traffic.Xudong submarket: A common stomping ground for nearby local residents, Xudong is a mid-range retail destination, anchored by the Wuhan Xiao Pin Mao Shopping Mall. Relatively few competing projects exist within a large radius, and the population density is high.Wuhan Tiandi submarket: An emerging area within northern Hankou, this submarket is centred on the multi-phase Wuhan Tiandi development which will expand to include enclosed shopping centre space. With an incoming supply of high-end residences, this area may become a luxury market in the future.

Wuhan

Oceanwide City Square (opened in 2014)

Guanggu World City (opened in 2008)

Wuhan International Plaza (opened in 2007)

City Overview


Market Outlook: Wuhan is expected to nearly double its urban shopping mall floor space over the medium-term. Future expansion will be driven by a smaller number of large projects. While the open-air malls built in the last few years are not expected to become extinct just yet, such properties will continue to fade into the background as new, enclosed malls win over customers who are increasingly adapting to big city-shopping habits. Wuhan still has sufficient room to grow its retail market. Developers have only just started building up retail in the city’s outer areas. The emergence of the modern shopping mall is still a relatively new concept for Wuhan. Currently, about 25 per cent of the local population makes up the consumer class; that figure is expected to grow by nearly 3 million people come 2020. Though less famous for free-spending than some of its cousins further west, Wuhan still holds huge potential. Retailers will need to search for ways to unleash local residents’ spending potential.

Key Indicators Wuhan China 30 Ranking







Jiefang Road

Qingnian & Jianshe

Jiedaokou

Zhongnan Road

Xudong

Guanggu

Wangjiawan

Wuhan Tiandi

Jianghan Road



One of the richer cities in southern Jiangsu province, Wuxi has urbanized swiftly and this has led its retail market to mature quickly in the last couple of years. New supply within the last year or so has been monumental in paving the way for the city to welcome new retail, raising the overall prestige of the local retail market with a number of firsts. In 2014, Wuxi opened the first Apple store in the Yangtze River Delta, excluding Shanghai, while the city’s fast-developing suburbs presented Inter Ikea’s first China shopping centre concept LIVAT. As shopping malls become a large part of the retail scene, they have been a boon for retailers, doubling or even multiplying the number of existing branded stores in the city, while simultaneously introducing new brands to local residents. As a result of the city’s robust and diverse economic base with a strong private sector presence, Wuxi residents enjoy one of the more comfortable disposable income levels within China’s privileged eastern region, and are expected to support retail consumption demand going forward.

Chong’an CBD submarket: This submarket is the most important and developed retail destination in Wuxi, hosting a significant number of the luxury brands present in the city. Hang Lung’s new Center 66 opened in 2013, extending luxury brands across the submarket instead of keeping them largely confined to Oriental Department Store and Yaohan Department Store. Center 66 has also done well to give the city additional stores for prestigious brands already in the local market; it houses Wuxi’s second LV and D&G stores. The project has also introduced new high-end brands, such as Valentino and Miu Miu, to local residents. Home appliances giant Suning also chose this submarket to make its foray into the commercial real estate market with its new mid-range mall in 2013. Taihu Square submarket: Despite having a link to Metro Line 1, the retail market has been slow to develop here as locals do not think of this area as a shopping destination. Retail projects are scattered throughout the submarket, which features a large park and public facilities, making the properties inconvenient to walk between, especially in the absence of pedestrianized roads. Attached to its existing department store, Maoye opened a shopping mall in 2013, but like many developers in the submarket, struggles to draw foot traffic to its new project. Several shopping malls in Binhu and Beitang submarkets also lure shoppers from here away, further hindering retail development in this precinct.

Binhu submarket: Encompassing an enormous geographic area, this submarket boasts the most important emerging retail precinct in the city. This area contains Wuxi’s new CBD, which is brimming with development potential over the medium-term. Wanda already has a project in this area and plans to open a second mixed-use project in this submarket in the not-so-distant future. Plans indicate that it will be developed as the first project of its kind in China, slated to showcase a theme park to compete with Shanghai’s Disneyland and serve as the developer’s third project in Wuxi. The mixed-use project is projected to have a total investment of more than RMB 30 billion and a GFA of 1.2 million sqm, including 120,000 sqm of retail space and several hotels. Also in this submarket is the new Coastal City, a mid-range shopping mall anchored by fast fashion; additionally, a MixC project is coming soon. Given the considerable distances between all of these projects, none of them are expected to be within direct competition of one another. Beitang submarket: This retail precinct has a focus on the low-end market and is characterized by a weak presence of existing and future shopping malls. It fails to drive strong foot traffic and consequently, the submarket’s retail development is expected to remain more or less stagnant over the medium-term.

Wuxi

Centre 66 (opened in 2013)

Huishan Wanda (opened in 2013)

Wuxi Yaohan Department Store (opened in 1996)

City Overview


Market Outlook: Just a two hour drive from Shanghai, Wuxi is among the wealthier Yangtze River Delta cities with the greatest retail development potential on the horizon. The city’s existing Metro Line 1 and future Metro Line 2 will better integrate retail precincts and improve accessibility of key retail areas. The rise of shopping malls has happened quickly – rising from nearly zero to a wide selection in the short span of some two or three years, a process that is set to continue. This has boosted the presence of fast fashion and other major brands across Wuxi. The overall market is expected to be supported by an increasingly affluent local population. The city’s consumer class is projected to grow by about 50 per cent by 2020. Relatively well-to-do, but more price-sensitive consumers from neighbouring cities within the Yangtze River Delta are further expected to propel Wuxi’s development as a regional shopping destination, particularly after the opening of Wanda’s massive mixed-used project as its theme park offers consumers an attractive alternative to nearby Shanghai’s Disneyland.

Key Indicators Wuxi China 30 Ranking







Chong'an CBD

Binhu

Taihu Square

Beitang



A major coastal city on the south-eastern tip of Fujian province, Xiamen is a tourist-friendly city that derives a substantial portion of its retail sales from visitor spending. A steady stream of rising middle-class residents, who enjoy a significantly higher disposable income than their provincial peers, has propelled the double-digit sales growth of its mass market-dominated retail industry in recent years. Improved public transit, linking Xiamen’s main island and its off-island districts, has also driven population inflows from nearby cities, adding to the city’s retail sales. Local government plans to develop a ‘one-hour inter-city transit system’ are expected to further enhance connectivity among bordering cities and draw even more consumers in the future. Advanced development of the city’s retail market over the years has provided Xiamen with one of the most modern landscapes among Tier 2 cities as its total retail stock is almost exclusively dominated by shopping malls.

SM-Jiangtou submarket: Situated in a traditional CBD, this area is a mature retail precinct that offers local shoppers and tourists a one-stop shopping experience with a comprehensive range of retail options, from low to mid-range department stores to high-end shopping centres carrying local labels and a growing number of international brands. The city’s only luxury shopping mall – Paragon Center, is located here and offers all of the luxury brands present in Xiamen. In addition, mid to high-end projects SM City Plaza and SM Lifestyle Centre, which are the city’s most popular shopping centres, are located here. They attract local shoppers as well as those from nearby cities.Railway Station submarket: Due to its convenient location within close proximity of the city’s railway station and with easy access to rapid transit bus lines, the retail precinct has a low-end to mid-market focus and benefits from high foot traffic. Budget-conscious shoppers flock here for the latest looks from low-end fashion retailers. A future MixC will change the character of this area, and upon completion, it is expected to trigger a wave of upgrades in the submarket. In the submarket’s north end near the city government, the project will have convenient access to nearby residential housing and Lujiang, a traditional CBD.Zhongshan Road submarket: Renowned for its historic streets, this retail precinct, also located in a traditional CBD, benefits from its close proximity to Gulangyu Island, Xiamen’s most popular tourist attraction. With historic designs, well-branded department stores, landmark shopping mall China City and plenty of F&B options, the submarket does well to attract visitors. China City is currently under refurbishment, but when it re-opens in the future, it is expected to offer consumers more F&B and experience-oriented options.

Qianpu-Ruijing submarket: With a low-end to mid-market positioning, two prime retail projects, California City Plaza and Ruijing Commercial Plaza, separated by an overpass across the street from one another, are both major destinations. Their strong F&B, entertainment and fashion brand offerings attract a heavy footfall. Located in a crowded residential area, a majority of the shoppers here seek community-based retail, where they can shop, dine and buy groceries. Emerging submarkets: Situated east of the city centre and out toward the beach areas, these developing retail precincts include Wuyuan Bay, Guanyinshan and Hubian Reservoir. While the latter area is home to several high-end residential compounds, retail supply is relatively sparse despite the existence of Huli Wanda Plaza. This precinct will take time to mature. Guanyinshan, however, has potential to mature more quickly, considering ongoing infrastructure upgrades taking place in the area as well as the construction of the Xiamen Cross-Straits Financial Center. The project is expected to lead to the development of a new CBD, where offices and headquarter buildings are currently being built. Foot traffic remains low for the time being, but once the Xiamen Cross-Straits Financial Center is finished, it is expected to bode well for retail demand.

Xiamen

Ruijing Commercial Plaza (opened in 2013)

Wanda Plaza (opened in 2011)

California City Plaza (opened in 1999)

City Overview


Market Outlook: Of all the cities regularly tracked by JLL, Xiamen is among those slated to see the fewest new projects over the medium-term. Most new projects are expected to be of high quality, however, given that many are being built by experienced developers. First Dreams Zone Department Store by Rainbow Group is expected to be among the best new mid-range to high-end projects coming to the city. In the emerging submarkets, Guanyinshan will form a new CBD and though a large crowd of white-collar workers are expected to eventually zero in on the area and drive retail demand, this will take some time as the submarket is likely to take several years to reach maturity. Further bolstered by strong transit links in the future, there is also optimism for Jimei, a submarket off the city’s main island, which holds Xiamen’s biggest concentration of universities. Jimei Wanda does well here and future retail projects are likely to find further opportunities here as more people move into new residential projects. Within the city’s maturing retail market, meanwhile, we can expect to witness a significant amount of building upgrades as landlords seek to maximize the potential of existing properties to consolidate their position in the market as preferred destinations for emerging middle-class consumers and tourists. The consumer class is set to increase by just over 1 million people by 2020.

Key Indicators Xiamen China 30 Ranking







SM-Jiangtou

Zhongshan Rd

Railway Station

Qianpu-Ruijing

Emerging Submarkets

Emerging sub-markets include Wuyuan Bay, Guanyinshan and Hebin Reservoir and Jimei Source: JLL Research


Straddling North China and West China, the Shaanxi provincial capital of Xi’an is uniquely positioned as a major tourist destination and as a commercial shopping hub. Xi’an’s access to two regional populations from a vast geographical area provides the city with huge retail sales potential, especially as the number of middle-class shoppers living near Xi’an continues to increase. Surrounded by wealthy coal mining towns, particularly to the north in the Shanbei area, the city further benefits from a strong group of wealthy locals and rich individuals from nearby provincial towns. The latter support Xian’s retail market through regular purchases, as shopping options in their local areas pale in comparison to those offered in the big city. Though department stores remain the most common retail format in the city, shopping malls are quickly gaining ground and are expected to outnumber department stores in the not-too-distant future. Many department stores mimic a shopping mall layout, indicating that while developers are open to change, more time is needed for them to fully detach themselves from the old, traditional operating model.

Bell Tower submarket: With a high concentration of existing projects, this submarket is the most mature and significant. The high-quality Century Ginwa Department Store opened in 2013 and is the most eye-catching project in the submarket, but in terms of positioning, Zhongda International remains the city’s highest-end retail property. The established Kaiyuan Shopping Mall, a mid to high-end project, is the top performer: in 2013, it recorded about RMB 3.2 billion in revenues, the highest in the city. Situated at the interchange of two subway lines, this retail area benefits from strong daily footfall and will welcome more high-profile projects in the future.Jiefang Road submarket: Close to the train station, this submarket connects the city to outside provinces via high-speed train and is home to one of the most traditional retail clusters. The city’s first Minsheng Department Store, which opened in 1959, is located here. The precinct was once very crowded, but underdeveloped infrastructure contributed to a decline in the area’s popularity. The opening of a Wanda Plaza in 2008 has helped the submarket rebound. Foot traffic is on the rise, but still lags behind the levels experienced in its heyday.Xiaozhai submarket: Another mature and crowded submarket, Xiaozhai serves nearby residents and university students. Given the heavy concentration of universities and colleges in the area, there are no high-end projects. But the mid-range Intime Department Store and Saga Shopping Mall do well to respond to student demand. With plenty of F&B and entertainment options such as rock climbing for kids, this property is able to draw in crowds.

Second Ring Road submarket: With one of the city’s highest concentrations of residential projects, this area covers a lot of ground, and as such, caters to a wide range of consumers. Relatively established projects Wanda Plaza-Lijiacun and Vivo City do well here, although newer entrants that have opened in the past year or two are clawing their way in with new tenant mixes and pumped-up F&B and fast fashion offerings. Qujiang submarket: Home to Dayan Tower, this retail precinct is a tourist destination and though it has a small retail cluster, the projects are relatively new and still need time to mature as well as determine which brands and market-positioning visitors and nearby residents require. A future Gemdale Plaza is expected to do well among local residents living here as it is focused on community-shopping. Local government plans to further develop this area for tourists, lending more optimism to the submarket’s future retail demand. Hi-tech submarket: With few retail projects, this emerging retail precinct is still in the process of maturing. In the submarket’s far south, several new large-scale projects are planned for the future. New housing is expected to fuel demand once more people settle in the area.North City submarket: A key emerging economic zone, North City is expected to benefit from local government incentives which have already succeeded in attracting Fortune 500 companies to set up operations here in recent years. In retail, Taubman’s first China development is coming soon to this submarket; it will be anchored by a Wangfujing department store.

Xi’an

CapitaMall Xindicheng (opened in 2012)

Tang West Shopping Mall (opened in 2012)

Vivo City (opened in 2011)

City Overview


Market Outlook: Xi’an is expected to nearly double its total urban retail stock over the medium-term, with much of it coming in the form of shopping malls. With the exception of Jiefang Road, most of the future supply is spread out evenly across all of the city’s centralised areas, and as such, is expected to alter the physical aesthetic of the local retail scene in core areas. A stronger F&B presence is expected to be seen throughout the city, in both centralised and decentralised areas, given that casual dining concepts are beginning to take off in the city. Xi’an’s aerospace, high-tech and IT industries are expected to drive the economy and push up local residents’ incomes. The city’s consumer class is predicted to more than double by 2020 to add another some 2.5 million shoppers to the market. Affluent locals will lead the charge in demand for a more diverse set of high-end brands that stray off the mainstream path where the usual Gucci and Louis Vuitton suspects are; they are predicted to seek out more of the Jimmy Choos and Balenciagas. In the next several years, meanwhile, the developing Hi-tech submarket is projected to make steady progress towards maturity. A 270 meter-tall retail project will be built in the high-tech zone by Greenland Group and will raise the area’s citywide status. Other experienced developers will also build high-quality properties ahead, with a better consciousness about how to deliver and execute their projects well.

Key Indicators Xi’an China 30 Ranking







Bell Tower

Xiaozhai

High-tech

Jiefang Rd

North City

2nd Ring Rd

Qujiang



Conveniently connected to Beijing by high-speed rail, the central Henan provincial capital is one of the largest cities in the North China plain. An increasing number of domestic and international developers are moving into the city despite intensifying market competition. With a greater sense of brand awareness and consumer culture, the city is expected to benefit from increasingly brand-savvy local and provincial shoppers, though it is not yet mature as a regional shopping hub. However, the rapid emergence of shopping centres over the medium-term is projected to more than double the urban retail market’s floor space. Zhengzhou’s disposable income per capita trails behind its provincial capital peers. To some extent, this has prevented the city’s luxury segment from flourishing; but as a viable and lucrative alternative, many developers here are working to build the mid-range market until local residents’ higher incomes can support a stronger luxury market in the future.

Er’qi Road submarket: Near the city’s railway station, this traditional precinct attracts a large volume of consumers citywide as well as from other cities in the province. Dennis Department Store dominates the high-end market here, enjoying a reputable status among an affluent group of repeat customers. The submarket, which is generally positioned towards the mid-market, has the highest concentration of centrally located department stores, but many aging properties here are expected to lose out to new, better-managed projects coming to the area over the medium-term. The new Metro Line 1 connects the rest of the city to this submarket, which will further benefit from the city’s transit system when Metro Line 2 is completed. Huayuan Road submarket: A popular shopping area, particularly among younger shoppers, the submarket enjoys a mid-range positioning though several projects have upgraded to spill over into the high-end market. Before the new MixC opened, the submarket’s International Trade 360 Plaza was unwaveringly considered the city’s best mall, favoured for its biggest collection of international brands. But competition from the new MixC and the future Dennis David Mall in the nearby Er’qi Road submarket could challenge International Trade 360 Plaza’s coveted mall status.

Western District submarket: Housing the city’s only destination for luxury brands, the submarket’s Yuda Fufu Shopping Plaza has recently suffered from noticeably low foot traffic, given the impact of the central government’s anti-graft calls. Two new projects targeting the mid-range market will come to the submarket over the medium-term, forming a clustering effect and providing an alternative to the more established Er’qi Road and Huayuan Road submarkets. Jinshui Road submarket: Situated in a densely populated area, this submarket is more focused on community-based shopping with projects like CapitaLand Plaza and Manhattan Plaza. The mass to mid-market positioning targets nearby residents. Zhengdong New District submarket: In the city’s new CBD area, this emerging retail precinct is full of projects built to serve the new white-collar employees who live and work in the area. Landmark mall project Dennis Mid-Town Seven and the underperforming Powerlong Plaza may not be wildly popular, but cater to the local community. As more high-end residential projects are developed in the area, other developers are eyeing a potential high-end segment in the market. Taubman is among them and plans to open CityOn.Zhengzhou, featuring a Wangfujing department store.

Zhengzhou

The MixC (opened in 2014)

Er’qi Wanda Plaza (opened in 2012)

International Trade 360 Plaza (opened in 2010)

City Overview

Zhengdong New District


Market Outlook: With a considerable amount of new urban supply coming over the mid-term, Zhengzhou’s retail market is set to become heavily developed, creating a more competitive market. With a growing presence of fast fashion brands like H&M and Zara, the city has a maturing mid-range retail market. With the exception of Jinshui Road submarket, the new supply will be distributed throughout the city, with an emphasis on the emerging Zhengdong New District submarket. Developers and operators with an established presence, such as Dennis and Wanda, will have the advantage in terms of maintaining and continuing to grow their enviable positions. Though Zhengzhou failed to make China’s top 10 in terms of retail spending in 2013, future retail sales are expected to nearly double by 2020. Local residents’ rising incomes will help close the gap between them and their provincial peers; Zhengzhou’s per capita disposable income is also expected to nearly double by 2020. Local government plans to add another five metro lines to the city’s new urban rail system are also expected to improve citywide accessibility and further boost trade at connected retail precincts in the future.

Key Indicators Zhengzhou China 30 Ranking







Western District

Huayuan Rd

Er'qi Rd

Zhengdong New District

Jinshui Rd



A rising major city in the southern Pearl River Delta, Zhuhai benefits greatly as a tourism destination and neighbour of wealthy Macau. Also one of the first places in China to be designated a Special Economic Zone, its advantageous location has helped the city prosper economically, driving up retail sales quickly in the past decade. At the same time, the city’s close proximity to far more luxurious shopping destinations like Macau and Hong Kong has been anything but a boon for its immature retail market, as affluent residents strongly prefer to travel to the well-developed cosmopolitan markets just a ferry ride away. Given the lure of Macau’s duty free shopping and Hong Kong’s wide selection of high-end brands, Zhuhai’s luxury market is essentially non-existent. Though local residents’ disposable incomes have seen double-digit growth over the past few years, the city’s lack of transparency in the local retail market is a further hindrance on the development of the high-end market; most luxury names in Zhuhai persist in the market almost exclusively as illegitimate brands. As a result, much of Zhuhai’s retail scene is focused on the low to mid-market, though a touch of the high-end market has recently come online.

Gongbei submarket: This area holds the biggest port of entry in China, which brings in some 300,000 daily visitors. As a result, footfall is extremely heavy and the catchment area not only extends citywide, but also beyond to nearby counties. Local developers dominate this low-end market that holds the highest concentration of projects in the city, but a strong market for copycat brands stunt growth potential here more so than in other areas of the city. The new MO mall has struggled to draw crowds since opening as a strata-titled project. A future mid-range Times Square is coming soon. Jida submarket: With the city’s main CBD located here, this area benefits from a large population of white-collar workers and enjoys citywide catchment. The established area has a strong cluster of three low to mid-range projects: Zhuhai Shopping Mall, Zhuhai Duty Free Shop and International Trade Shopping Plaza. Though the properties are old, the projects continue to attract crowds and remain popular among locals. Xiangzhou submarket: This traditional area is a popular place for local residents to settle, and as such, the retail precinct here has a larger focus on community-based shopping to draw repeat customers. A new retail project – Yale Plaza Phase 2 – will open here soon to serve the local population.

New Xiangzhou submarket: This extension of Xiangzhou is becoming an urban hub of its own. Though it has less foot traffic than its predecessor, it still manages reasonable footfall and has district-wide appeal. At this stage, the area only has Vanguard and Wang Jiao Department Store to support the retail market.Qianshan submarket: Adjacent to Gongbei, this submarket is strategically situated near the city’s busiest retail precinct though its market positioning as a low to mid-range furniture market means it benefits little from its advantageous location. The area has citywide catchment, benefitting from strong public transit links. Nanping submarket: This young submarket serves the mid-range and upmarket, and is mainly driven by Huafa, which recently opened Huafa Mall, giving Zhuhai its highest quality project with a touch of the high-end segment. The property embodies a design that mirrors that of a brand new Hong Kong mall built to a high standard. With a strong mid to high-end positioning, Huafa Mall has fast fashion brands like H&M and Uniqlo and has been quick to gain heavy footfall since opening.

Zhuhai

Huafa Mall (opened in 2014)

International Trade Shopping Plaza (opened in 1992)

Zhuhai Duty Free Shop (opened in 1992)

City Overview


Market Outlook: Zhuhai is expected to roughly double its urban retail stock over the medium-term, but most of this will be done through just a small handful of larger-scale projects. The biggest of them to come is the Mid-Town Uni Park, which will be modestly larger than the new Huafa Mall. Considering that Macau and Hong Kong are just short daytrips away, giving local residents access to whatever brands their pocketbooks can afford – and at highly reasonable duty free prices – Zhuhai will be seriously challenged when it comes to upgrading its low to mid-range retail market. However, that is not to say that the city’s retail positioning is without opportunities: Zhuhai’s retail sales ranked second in the Pearl River Delta in 2013, even despite the city’s disposable incomes coming in fifth within the region. The city’s tourism draw and the wealth effect of nearby Macau continue to prop up the market. Economic momentum gained from its link along the Guangzhou-Zhuhai Intercity Railway will be further bolstered by the Hong Kong-Zhuhai and Macau Bridge, which is to be completed in the next couple of years. Local residents will also contribute to consumption growth as fast fashion giants gain more traction in the future and as disposable incomes rise. Zhuhai had a per capita disposable income of RMB 36,400 in 2013; the figure is projected to nearly double by 2020.

Key Indicators Zhuhai China 30 Ranking







Nanping

New Xiangzhou

Jida

Xiangzhou

Gongbei

Qianshan


Number of

Shopping

Malls

Urban

Shopping Centre

Floor Space per

Consumer

Shopping

Mall / CentreThe total number of malls that meet

requirements within the contiguous urban area.

This figure represents all shopping mall floor space within the contiguous urban area of the city divided by the number of people within the consumer class. The consumer class is based

on income distribution figures.

A building or set of buildings which contain a collection of shops connected by a common

area, indoor or outdoor. The property must also meet other conditions relating to size, function, ownership, and anchor tenants. If a department

store is a tenant within a shopping mall, the entire property is counted as a shopping mall.


Glossary of Terms

JLL offices in Greater China

Beijing11/F China World Tower 1 Jianguomenwai Avenue Beijing 100004, Chinatel +86 10 5922 1300 fax +86 10 5922 1330Chengdu29/F, Tower 1 Chengdu International Finance Square 1 Hongxing Road Section 3 Chengdu 610021, Sichuan, Chinatel +86 28 6680 5000 fax +86 28 6680 5096Chongqing2501A-2506 Metropolitan Tower 68 Zourong Road, Central District Chongqing 400010, Chinatel +86 23 6370 8588 fax +86 23 6370 8598GuangzhouRoom 2401-03, 24/F Main Tower Guangzhou International Finance Center No.5, Zhujiang Xi Road Tianhe District Guangzhou 510623 Guangdong, Chinatel +86 20 2338 8088 fax +86 20 2338 8118

Nanjing8/F Asia Pacific Tower 2 Hanzhong Road Gulou District, Nanjing 210005 Jiangsu, Chinatel +86 25 6610 2688 fax +86 25 6610 2257 QingdaoUnit 2308 Tower A, COSCO Plaza 61 Hong Kong Middle Road Shinan District, Qingdao 266071 Shandong, Chinatel +86 532 8579 5800 fax +86 532 8579 5801Shanghai25/F Plaza 66, Tower 2 1366 Nanjing Road West Shanghai 200040, Chinatel +86 21 6393 3333 fax +86 21 6393 3080Shenyang1808 Office Tower, L’Avenue 10 Huigong Street, Shenhe District Shenyang 110013 Liaoning, Chinatel +86 24 3109 1300 fax +86 24 3109 1330

ShenzhenRoom 2801-02, 28/F Tower Three, Kerry Plaza 1 Zhongxinsi Road, Futian District Shenzhen 518048 Guangdong, Chinatel +86 755 2210 0888 fax +86 755 2388 7600TianjinUnit 3509 The Exchange Tower 1 189 Nanjing Road Tianjin 300051, Chinatel +86 22 8319 2233 fax +86 22 8319 2230WuhanUnit 3202-03 Corporate Centre 5 1628 Zhongshan Avenue Jiang’an District Wuhan 430014, Hubei, Chinatel +86 27 5959 2100 fax +86 27 5959 2144Xi’anUnit 2202-03 CapitaMall Office No.64 West Section of South 2nd Ring Road Yanta District, Xi’an 710065 Shaanxi, Chinatel +86 29 8932 9800 fax +86 29 8932 9801

Hong Kong6/F Three Pacific Place 1 Queen's Road East Hong Kongtel +852 2846 5000 fax +852 2845 9117 www.jll.com.hkMacauUnit H, 16/F Finance and IT Center of Macau Nam Van Lake Quarteirao 5 Lote A Macautel +853 2871 8822 fax +853 2871 8800 www.jll.com.moTaipei20/F-1 TAIPEI 101 TOWER No 7 Xinyi Road Section 5 Taipei 11049, Taiwantel +886 2 8758 9898 fax +886 2 8758 9899 www.jll.com.tw

Jones Lang LaSalle

© 2014 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

Jones Lang LaSalle Retail contacts in China

East and Central ChinaEugene Tang tel +86 21 6133 5520 [email protected]

West ChinaDanny So tel +86 23 6366 9001 [email protected]

North ChinaAlice Law tel +86 10 5922 1116 [email protected]

South ChinaSimon Lam tel +86 20 3891 1238 [email protected]

A Overview of 30 Retail Locations in China

Retail

Transcript of A Overview of 30 Retail Locations in China