Shenzhen Luxury Stores Expand Slowly, Beijing Attracts International Retailers

CBRE, the world's leading commercial real estate services and investment company, has recently analyzed the investment opportunities of retail property in 17 major cities in China, and issued a special report on the retail property section of China's property investment guide.

The report considers that Shanghai, Beijing and Hangzhou are the best investment destinations for retail property, while second tier cities such as Shenyang and Wuxi suggest that investors should be more cautious.

For Shenzhen, the report said that Shenzhen, as a first tier city, did not enter the top four, ranking sixth overall. The reason is mainly due to Shenzhen's proximity to Hongkong, a considerable portion of its consumption demand, especially the high-end consumption demand. Hongkong also has a large supply volume and market liquidity in Shenzhen.

According to the report, CB Richard Ellis has selected 14 key variables that affect the performance of the retail property market and analyzed 17 major cities in the country.

Therefore, individual high-quality retail property investment opportunities in a low ranked city are still worth considering, while in a high ranked City, the quality of general retail property may not be worth investing.

Shanghai Beijing Hangzhou retail property is most worth investing

The report shows that the retail property market in Shanghai shows a trend of booming supply and demand and a steady increase in rents. The retail market vacancy rate has always been below 10%, and the core business circle rents have increased year by year and the annual compound growth rate has reached 7.9%.

At the same time, the turnover of retail property in Shanghai market was also very active. From 2005 to 2013, the bulk retail property in Shanghai (including a large volume of retail property with a turnover of more than 10 million US dollars) amounted to 34 billion 500 million yuan, about 31.6% of the total 17 cities monitored in the same period, ranking the top of the big cities.

At the same time, Shanghai's secondary business circle has been developing rapidly in recent years, and it is expected to enter a period of acceleration and diffusion.

From 2010 to 2013, Shanghai's secondary business circle grew by 67.1%, 46.6 percentage points higher than the core business circle, while the secondary business vacancy rate dropped from 15% at the beginning of 2010 to 11.3% at the end of 2013.

The potential for added value of Beijing's retail property is also worth noting.

Beijing's high-end consumption is outstanding, and its total retail sales of social consumer goods rank the first in the country, a large part of which is driven by high-end consumption.

The retail business in Beijing is relatively fragmented. The core business circle including Xidan, Wangfujing and CBD has only about 20% of the retail property in the city, and the remaining 80% of the retail property is located in the secondary business circle of the city.

Due to the tight supply of land in the five rings and the new regulations restricting the large-scale public building projects in the core area of the five rings, Beijing's retail market will show a "multi centralization" trend in the long run.

At the same time, Beijing has great attraction for international retailers.

According to statistics of World Bank Richard, Beijing alone attracted 34 new international brands in 2013, nearly three times compared with 2012.

The pace of international brands entering the Beijing market is accelerating.

The supply of scarce Hangzhou and Shanghai and Beijing belong to the third tier.

According to the World Bank report, Hangzhou's high quality retail property is in short supply, its property stock is small and its market vacancy rate is low. In the same period, Hangzhou's high quality retail property vacancy rate was only 1.7%, the lowest level in 17 cities.

In the report, Shenzhen, the first tier city, did not enter the top four, ranking sixth overall.

The report holds that although the per capita disposable income ranks first in the country and consumptive power is among the best, but because of its proximity to Hongkong, a considerable portion of consumption, especially high-end consumption, has been outflowing Hongkong.

On the other hand, Shenzhen has about two times its per capita commercial area and second of the first tier cities in Shanghai and Hangzhou.

In the next 3 years, the new commercial building area in Shenzhen will exceed 2 million square meters, and the ability of merchants and the retail market rent will be tested.

"Shopping in Hong Kong is

From September 2012 to September 2013, the proportion of Shenzhen residents who went shopping in Hong Kong reached 43% yuan, and the average consumption per capita was 11567 yuan, doubling than the previous year. Because of this, many luxury brands started to shop in Shenzhen relatively slowly, and the number of stores was relatively small. Compared with Shanghai Beijing, the number of luxury brand stores in Shenzhen was only about one-fifth, "said Chen Zhongwei, executive director of the research department of the State Department of Richard Ellis.

In addition, the characteristics of many young people in Shenzhen have stimulated the entry of fast fashion brands. Shenzhen has always been the first choice for fast fashion brands to enter the world. Some brands are obviously more than the number of stores or stationed in Guangzhou.

Chen Zhongwei also said that in the past 9 years, Shenzhen has recorded only 7 retail pactions involving more than 10 million US dollars, which is actually a relatively active activity of Shenzhen's individual investors in Shenzhen's retail property market, and the market pactions are mainly scattered, leading directly to the inactivity of mass trading activities.

Yantian one Haicheng restaurant tenants over 50%

In addition, from the latest statistics, the impact of the electricity supplier on traditional shopping space is also deeply affecting the change of Shenzhen shopping center.

According to statistics, in the third quarter, three shopping centers opened in Shenzhen, namely, the first Century Shopping Center in Huaqiang North, the first shopping center in Yantian District, one Haicheng and the nine square of China Aviation in Longhua.

They opened at 60%, 65% and 96% respectively, bringing a total supply of 200 thousand square meters to the market.

Among them, one of Haicheng's catering tenants is more than 50%, and the proportion of remittance catering accounts for 25% in the 21st century. 25% of the children's experience in the nine square of China air travel experience.

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In the face of the adjustment of format, catering and light luxury brands are active.

Chen Zhongwei said that in addition to some shopping centers in the core location of the introduction of food and beverage rental outdoor, recently, a number of food brands first entered Shenzhen: including Hongkong Michelin Sichuan restaurant, Chenxiang garden and Western style simple chain new elements.

Some light luxury brands continue to be distributed in the traditional special zones, and the new brands are generally favored by the core business circle.

On the whole, the vacancy rate of shopping centres has improved slightly, but the average vacancy rate of the city has increased by 0.2 percentage points to the end of 10.2%.