Hangzhou – October 2020 MARKET IN Retail MINUTES · 2020. 10. 28. · Brands restart store...
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1 savills.com.cn/research • Retail sales totalled RMB370 billion in the first eight months of 2020, down 5.8% compared to a year earlier. • No new shopping malls opened in the first three quarters of the year, though G.T. Land Plaza opened on the first day of the National holidays. • Core market vacancy rate rose to 9.8% in Q3/2020 up 0.6 of a percentage point (ppt) QoQ as shopping malls worked on tenant adjustments. • Core market first-floor retail rents remained unchanged at RMB17.7 per sq m per day in Q3/2020 and were down 1.5% YoY. • The F&B sector, one of the hardest hit by COVID-19, has recorded a swifter recovery than the fashion sector. • The development of the night economy has played a significant role in Hangzhou’s recovery. BoomShake, a new nightclub at the Kerry Centre, was well received by the market during the quarter. • Two shopping malls are expected to open in the final quarter of 2020. MARKET IN MINUTES Savills Research Retail Hangzhou – October 2020 Brands’ first stores still draw crowds Brands restart store expansion as the market gradually recovers with the “first store effect” still attracting shoppers. Savills plc Savills is a leading global real estate service provider listed on the London Stock Exchange. The company established in 1855, has a rich heritage with unrivalled growth. It is a company that leads rather than follows, and now has over 600 offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East. This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research. Anson Chan Director Hangzhou +86571 8102 0222 anson.chan@ savills.com.cn James Macdonald Senior Director China +8621 6391 6688 james.macdonald@ savills.com.cn RESEARCH RETAIL Please contact us for further information Savills team “As some retailers closed stores, retail centre managers took the opportunity to adjust tenant mixes, introducing brands that better meet local needs, though new brands continue to focus on leading projects.” JAMES MACDONALD, SAVILLS RESEARCH
Transcript of Hangzhou – October 2020 MARKET IN Retail MINUTES · 2020. 10. 28. · Brands restart store...
1savills.com.cn/research
• Retail sales totalled RMB370 billion in the first eight months of 2020, down 5.8% compared to a year earlier.
• No new shopping malls opened in the first three quarters of the year, though G.T. Land Plaza opened on the first day of the National holidays.
• Core market vacancy rate rose to 9.8% in Q3/2020 up 0.6 of a percentage point (ppt) QoQ as shopping malls worked on tenant adjustments.
• Core market first-floor retail rents remained unchanged at RMB17.7 per sq m per day in Q3/2020 and were down 1.5% YoY.
• The F&B sector, one of the hardest hit by COVID-19, has recorded a swifter recovery than the fashion sector.
• The development of the night economy has played a significant role in Hangzhou’s recovery. BoomShake, a new nightclub at the Kerry Centre, was well received by the market during the quarter.
• Two shopping malls are expected to open in the final quarter of 2020.
MARKETIN
MINUTES
Savills Research
Retail Hangzhou – October 2020
Brands’ first stores still draw crowdsBrands restart store expansion as the market gradually recovers with the “first store effect” still attracting shoppers.
Savills plcSavills is a leading global real estate service provider listed on the London Stock Exchange. The company established in 1855, has a rich heritage with unrivalled growth. It is a company that leads rather than follows, and now has over 600 offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East. This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. Whilst every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.
Anson ChanDirectorHangzhou+86571 8102 [email protected]
James MacdonaldSenior DirectorChina+8621 6391 [email protected]
RESEARCH
RETAIL
Please contact us for further information
Savills team
“As some retailers closed stores, retail centre managers took the opportunity to adjust tenant mixes, introducing brands that better meet local needs, though new brands continue to focus on leading projects.” JAMES MACDONALD, SAVILLS RESEARCH
2savills.com.cn/research
MARKET COMMENTARYRetail sales totalled RMB370 billion in the first eight months of 2020, down 5.8% compared to a year earlier. Online retail played a big part in the city’s retail sales in Hangzhou with online retail in first eight months, increasing by 12.2% YoY to RMB178 bn.
SUPPLY AND STOCKWhile construction work on many malls has resumed, many planned launches continued to be delayed. Consequently, no new projects have been added to core or suburban markets in the first three quarters of 2020, though G.T. Land Plaza opened at the start of the National Holidays. Total retail stock remained at 4.85 million sq m, with 1.27 million sq m in prime areas, 2.70 million sq m in non-prime areas and 840,000 sq m in suburban areas. Several high-profile shopping malls are expected to launch to the market within the next four years including Hangzhou Centre, K11 and West City Powerlong Plaza.
RENTS AND VACANCY RATESA number of retailers, after struggling in the first half of the year, closed locations, while other brands have been able to resume their store opening plans as the market gradually recovers. Landlords are also seizing upon the opportunity to adjust tenant mixes and introduce brands to meet local consumers’ needs.
The F&B sector, one of the sectors disrupted most by COVID-19, has seen a pickup in activity as the situation gradually returns to normal. Songhelou Noodle Shop (松鹤楼面馆) opened two stores in Hubin Intime 77 and MixC, while Peet’s Coffee opened in Raffles City. Meanwhile, new energy
vehicle brands have also opened stores including Weltmeister’s new location in Raffles City for showcasing its new models. Additionally, Japanese book store chain Daikanyama T-Site is expected to open its first store in China in Tianmuli (天目里) in October. Brands are taking the opportunity of weakened market conditions and more accommodative postures taken by landlords to secure locations market-leading malls.
Several malls are still adjusting tenant mixes, including Lixing 1157, Vanke Huanglong Centre and Joy City, and, as a result, core market vacancy rates have increased to 9.8% up 0.6 of a ppt QoQ and YoY. Hubin is the only submarket that saw vacancy rates fall in Q3/2020.
First-floor retail rents in core markets remained stable at RMB17.7 per sq m per day in Q3/2020 but fell 1.5% YoY. Hubin and Wulin have the highest rent at an average of RMB28.4 and RMB23.5 per sq m per day, respectively.
MARKET OUTLOOKThe market is expected to welcome two new projects including G.T. Land Plaza (高德置地广场) and Tianmuli in Q4/2020, The new projects are expected to receive a satisfactory pre-leasing performance given the improving market sentiment and renewed optimism.
Hangzhou’s retail market remains very competitive, especially as consumers require improved shopping, dining experiences and store presentation. Landlords need to constantly experiment with new ideas and adapt tenant mixes to keep pace with changing consumer trends.
Source Savills Research
GRAPH 1: Citywide Retail Supply, 2015 to Q3/2020
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GRAPH 2: Submarket Vacancy Rates, Q4/2015 to Q3/2020
Source Savills Research
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GRAPH 3: Submarket Rental Index, Q4/2015 to Q3/2020
Source Savills Research
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Source Savills Research
Retail
PROJECT NAME GFA (SQ M) AREA EXPECTEDLAUNCH YEAR
Hangzhou Ganglong Plaza
(杭州港龙城)250,000 East City 2021
Hangzhou Centre 80,000 Wulin 2022
TABLE 2: KEY FUTURE SUPPLY, 2020-2022
