The Shanghai market is robust with rents rising and vacancy rates falling, while other cities, such as Wuxi and Shenyang, are faced with a risk of oversupply.A study indicates that Beijing is the highest ranked as regards overall retail consumption, with consumers spending on high-end goods accounting for a large proportion.
CBRE claims that eight out of the 10 busiest shopping center construction cities globally are based in China.
The firm’s latest Marketscore report, which places focus on the retail market in the mainland, stated that Shanghai was the global leader in the construction of shopping centers, with 3.3 million square meters currently under construction. The city is followed by Chengdu, capital of Sichuan province, with 3.2 million square meters.
The report states that Shenyang is one of the first Chinese cities to be exposed to a risk of oversupply in the retail market. Its total stock amounted to 5.1 million square meters at the close of June, which is the highest for any second-tier city.
Hangzhou, Beijing and Shanghai offer the best investment prospects in retail real estate.
The new report which took cognizance of 14 key influencing indicators stated that the retail property market in Shanghai is experiencing strong supply and demand. Rents have increased at around 7.9% per annum and vacancy rates remain under 10%.
Land is in short supply in Beijing’s central area and new regulations which have been imposed prohibit the building of large public projects within main areas. This will result in the decentralization of the Beijing retail market.