Beijing BEIJING RETAIL Economic Indicators Q3 16 Q4 16 GDP Growth 6.7% 6.7% CPI Growth 1.2% 1.4% Retail Sales Growth 4.8% 6.5% Source: Beijing Municipal Bureau of Statistics Prime Average Retail Rents Q1 2017 Significant Q1 2017 Store Transactions Significant Projects Under Construction Past 12-Month Growth RMB/ EURO/ US$/ 12-Month sq m/mo sf/mo sf/mo Wangfujing 800 3,200 10.0 40.0 10.8 43.1 Xidan 1,000 2,400 12.5 30.0 13.5 32.3 CBD 800 3,000 10.0 37.5 10.8 40.4 Sanlitun 1,500 2,500 18.8 31.3 20.2 33.7 Zhongguancun 1,300 1,800 16.3 22.5 17.5 24.3 Exchange Rate: 1 USD = 6.8923 CNY = 0.9275 EUR as of 23 March 2017 *Average rents (RMB/sq m/mo) are based on ground floor in prime locations in major shopping centers, excluding management, promotional and other fees. Building Location Tenant Area (sq m) Beijing Yintai Center CBD COVA 120 Beijing Yintai Center CBD Classico Bellezza 30 Huaxi Hi-Up China World Trade Centre IIIB (Retail) Building China World Trade Centre IIIB (Retail) KWG Mall Wukesong CBD Location IKEA click-and-collect points LeEco Flagship Store Area (sq m) 3,000 N/A Completion Date CBD 70,000 Q2 2017 Chongwenmen 40,000 Q3 2017 Wangfu Central Wangfujing 50,000 Q3 2017 Emperor Group Center CBD 22,000 Q3 2017 Economy Retail sales in Beijing increased 6.5% y-o-y to RMB1.10 trillion in 2016. Online retail sales accounted for 18.6% of the total at RMB20.49 billion, up 20.0% y-o-y. F&B receipts grew 4% y-o-y to RMB91.8 billion for the year, and accounted for an 8.3% share of retail sales. Market Overview In Q1 2017, Beijing s asking retail rents on average saw a steady increase in five core submarkets. With no new projects entering the market over the quarter, retail stock remained at 12.11 million sq m. Notable store openings included dessert shop LVMH, COVA Patisserie and a LeEco Flagship Store. Elsewhere, IKEA opened its second click-and-collect points store in China on March 23 rd. Since the market entered a downturn in 2013, the F&B industry in Beijing has been active upgrading and transforming itself to adapt to a changing market. Since 2015, the market share for high-end restaurants has declined while popular take-out options and online food ordering have became more popular. With F&B a key way to drive footfall traffic to shopping centers, The Place has completed a series of upgrades of food brands on its B1 floor. Meanwhile, the luxury market has rebounded after a three-year slide due to China s anti-corruption campaign. Mainland China retail sales of Hugo Boss and Salvatore Ferragamo, for example, jumped 20% y- o-y and 13% y-o-y in Q4, respectively. Consumers have been less keen to buy goods from overseas merchants because of a depreciating yuan and disadvantages of using overseas purchasing agents. The price gap between Chinese and overseas markets has narrowed as luxury brands have tended to harmonize prices globally. A growing trend in Beijing s retail market has been the proliferation of neighborhood shopping centers serving local residents. Retail projects have been expanding to the city s suburban areas due to limited availability of land in core submarkets. Approximately 1.22 million sq m of new retail supply over the next two years is expected to be received in Fengtai, Tongzhou, Daxing and Yizhuang districts, accounting for 72% of total new supply in the city over the period. Neighborhood shopping centers are expected to continue to grow in popularity thanks to improvements in rail transit and the government s aim to disperse non-capital functions. cushmanwakefield.com
Beijing Contacts Sean Wang Vice President, Greater China,, North China Tel: +86 10 8519 8168 sean.s.wang@cushwake.com Duke Zhen Head of Retail Services, China Tel: +86 10 8519 8228 duke.sq.zhen@cushwake.com James Shepherd Research, Greater China Tel: +86 21 2208 0769 james.shepherd@cushwake.com Sabrina Wei Senior Associate Director Head of North China Research Tel: +86 10 8519 8087 sabrina.d.wei@cushwake.com About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop and live. The firm s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. In Greater China, the firm has a co-branded presence under the name of Cushman & Wakefield and operates 20 offices in the region. Cushman & Wakefield is among the largest commercial real estate services firms with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management, project management, tenant representation and valuation & advisory. To learn more, please visit www.cushmanwakefield.com. Disclaimer This report has been produced by Cushman & Wakefield for use by those with an interest in commercial property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Wakefield believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman & Wakefield shall not be liable to any reader of this report or any third party in any way whatsoever. Cushman & Wakefield shall not be held responsible for and shall be released and held harmless from any decision made together with any risks associated with such decision in reliance upon any expression of opinion in the report. Our prior written consent is required before this report can be reproduced in whole or in part. 2017 Cushman & Wakefield All rights reserved. cushmanwakefield.com
Guangzhou GUANGZHOU RETAIL Economic Indicators GDP Growth 8.1% 8.2% CPI Growth 2.6% 2.7% Retail Sales Growth 8.6% 9.0% Source: Guangzhou Municipal Bureau of Statistics Prime Average Retail Rents Q1 2017 Significant Q1 2017 Store Openings Significant Projects Under Construction Q3 16 Q4 16 Past 12-Month Growth Exchange Rate: 1 USD = 6.8923 CNY = 0.9275 EUR as at 23 March 2017 *Average rents (RMB/sq m/mo) are based on the ground floor in major shopping centers, excluding management fee, promotional fee and other fees. Building Location Tenant Area (sq m) Capitamall Sky+ Baiyun Taste 3,500 Parc Central Tianhe Sports Center A&F 700 GT Land Plaza Winter Mall Zhujiang New Town Maria Luisa 350 Happy Valley Zhujiang New Town Putien 300 Building RMB* EUR US$ 12-Month sq m/mo sf/mo sf/mo Tianhe Sports Center 1,238.8 15.5 16.7 Zhujiang New Town 503.7 6.3 6.8 Yuexiu 1,095.0 13.7 14.8 Haizhu 683.3 8.5 9.2 Liwan 350.0 4.4 4.7 Baiyun 386.7 4.8 5.2 Guangzhou 810.4 10.1 10.9 Location Area (sq m) Completion Date K11 Zhujiang New Town 60,000 2017 Baiyun Hui Baiyun 100,000 2017 Element 6 Haizhu 80,000 2017 Way World Tianhe Coach Terminal 40,000 2017 Economy Retail sales in Guangzhou increased 9.0% y-o-y to RMB870.6 billion in 2016. The city continued to lead all Tier-1 cities in terms of sales performance. The quarter saw retailers leverage several public holidays to launch discounts and promotions to boost sales. Market Overview * Delivery of Wansheng Plaza in Q1 raised prime retail stock to 2.29 million sq m. Rent averaged RMB810.4 for the quarter with stable performance compared to Q4. The vacancy rate across the city s core retail hubs edged up to 7.7% in Q1 on new supply and ongoing adjustment in some existing malls. A number of malls continued to fine tune their tenant mix and carry out upgrades to adapt to market changes. For example, GT Land Plaza Spring Mall, which witnessed the close of the 15,000 sq m GBF Department Store in Q1, is in the process of tenant mix adjustment, targeting established retailers, popular F&B outlets and experimental elements. GT Land Plaza Winter Mall has established a clear positioning by introducing more niche brands, designer labels and entry lux brands. China Resources Group announced plans to open a new 3,000 sq m high-end Ole supermarket in igc Mall within the year. Elsewhere, notable openings included Abercrombie & Fitch s first store in Guangzhou as well as French cosmetics brand Sisley, both at Parc Central. La Perle welcomed the entry of UK luxury accessories retailer Jimmy Choo, yet contended with the close of Gucci. Amall introduced a Uniqlo shop, while Park n Shop s high-end brand, Taste, opened a 3,500 sq m store in Capitamall Sky+. Efforts by malls to differentiate their property through tenant adjustments, upgrades and marketing activity have successfully increased footfall, as well as commercial value. For example, Tai Koo Hui achieved 10% y-o-y sales growth in 2016, remaining in positive territory for 20 consecutive quarters. A tenant mix adjustment at IFC Mall helped attract more customers, increase rent and grow retail sales. Ahead, the market is set to receive more than 280,000 sq m of new retail supply in 2017. Amid fierce market competition and an economic slowdown, it is anticipated that the overall vacancy rate will rise slightly in the short term while rent growth will experience downward pressure. * Beginning in 2017, Cushman & Wakefield has expanded coverage of Guangzhou s prime retail area to cover Tianhe Sports Center, Zhujiang New Town, Yuexiu, Haizhu, Liwan and Baiyun. www.cushwake.com
Guangzhou Contact Kelvin Li, Central China General Manager, Guangzhou & Zhengzhou Tel: +86 20 8510 8138 kelvin.qw.li@cushwake.com Duke Zhen Director General Manager of Retail Services, China Tel: +86 10 8519 8228 duke.sq.zhen@cushwake.com James Shepherd Research, Greater China Tel: +86 21 2208 0769 james.shepherd@cushwake.com Gracie Miao Senior Analyst Research, Central China Tel: +86 20 8510 8191 gracie.sy.miao@cushwake.com About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop and live. The firm s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. In Greater China, the firm has a co-branded presence under the name of Cushman & Wakefield and operates 20 offices in the region. Cushman & Wakefield is among the largest commercial real estate services firms with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management, project management, tenant representation and valuation & advisory. To learn more, please visit www.cushmanwakefield.com. Disclaimer This report has been produced by Cushman & Wakefield for use by those with an interest in commercial property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Wakefield believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman & Wakefield shall not be liable to any reader of this report or any third party in any way whatsoever. Cushman & Wakefield shall not be held responsible for and shall be released and held harmless from any decision made together with any risks associated with such decision in reliance upon any expression of opinion in the report. Our prior written consent is required before this report can be reproduced in whole or in part. 2017 Cushman & Wakefield All rights reserved. www.cushmanwakefield.com
Shanghai SHANGHAI RETAIL Economic Indicators Q3 16 Q4 16 GDP Growth 6.7% 6.8% CPI Growth 3.2% 3.2% Total Retail Sales Growth 7.9% 8.0% Source: Statistics Bureau for Shanghai Prime Average Retail Rents Q1 2017 Past 12- Month Growth Economy Shanghai s GDP reached RMB2.75 trillion in 2016, up 6.8% y-o-y. The city s retail sales picked up 8.0% y-o-y to total RMB1.09 trillion for the year. Market Overview There was no new prime retail supply delivered in Q1. Stock remained around 2.4 million sq m in the city s core areas. Average first floor asking rentals in core areas increased 0.8% q-o-q to RMB1,925 per sq m per month at the end of Q1. The occupancy rate remained around 95% at the end of the quarter. RMB* EURO US$ Q-O-Q 12-Month sq m/mo sf/mo sf/mo Change Nanjing East Rd 1,988 25.39 26.51 0.3% Nanjing West Rd 2,425 31.05 32.42 0.0% Huaihai Middle Rd 1,600 20.49 21.39 0.2% Xujiahui 2,239 28.67 29.93 0.0% Lujiazui 1,664 21.31 22.24 0.0% Note: 1 USD = 6.950 RMB = 0.958 EUR as of 23 December 2016 * Rent equals First floor asking rent Significant Q1 2017 Store Openings Building Location Tenant Area Lippo Plaza Huaihai Middle Rd Victoria s Secret 1,500 sq m N/A Huaihai Middle Rd Kuma Café N/A Raffles City Nanjing East Rd Heekcaa N/A Plaza 66 Nanjing West Rd Moncler N/A Plaza 66 Nanjing West Rd Brunello Cucinelli N/A Significant Projects Under Construction Building Location Area Completion Date There were several notable store openings in Q1. In March, Victoria s Secret launched its first full-range store in China at Lippo Plaza, taking up 1,500 sq m over four levels. Elsewhere, beverage brand Heekcaa opened its first Shanghai shop in the first floor of Raffles City, leveraging a large social media presence to bring in customers. Kuma Café, which opened a new shop along bustling Huaihai Road, is utilizing a similar strategy. Meanwhile, mall owners and operators increasingly turned to building improvements to attract customers. Plaza 66, which has been under renovation since 2016, opened the B1 level with new tenants Moncler and Brunello Cucinelli. In Xujiahui, Grand Gateway 66 will be refurbished this year. Significant upgrades have been underway in the Huaihai Middle Road submarket. Last year, new tenants included Line Café, Gentle Monster and 8 Seconds. Late in 2016, Junior Department Store and Pacific Department Store both closed for refurbishment, with works already begun on the latter. Core areas of Shanghai remain attractive thanks to their location and quality retail projects, helping to keep rental growth robust looking ahead. On the other hand, decentralization is becoming a growing trend. This year, a total of 2 million sq m of prime retail supply is scheduled to launch in non-core areas compared to around 420,000 sq m of new supply expected in the city s five prime retail submarkets. HKRI Taikoo Hui Nanjing West Rd 100,000 sq m 2017 Gala Bay Lujiazui 138,000 sq m 2017 Century Link Lujiazui 140,000 sq m 2017 www.cushmanwakefield.com
Shanghai Contact Mimie Lau, East China Tel: +86 21 2208 0100 mimie.sw.lau@cushwake.com Keith Law Director, Retail Services, East China Tel: +86 21 2208 0225 keith.pk.law@cushwake.com James Shepherd, Research, Greater China Tel: +86 21 2208 0769 james.shepherd@cushwake.com Shaun Brodie Head of Occupier Research, Greater China Tel: +86 21 2208 0529 shaun.fv.brodie@cushwake.com About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop and live. The firm s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. In Greater China, the firm has a co-branded presence under the name of Cushman & Wakefield and operates 20 offices in the region. Cushman & Wakefield is among the largest commercial real estate services firms with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management, project management, tenant representation and valuation & advisory. To learn more, please visit www.cushmanwakefield.com. Disclaimer This report has been produced by Cushman & Wakefield for use by those with an interest in commercial property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Wakefield believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman & Wakefield shall not be liable to any reader of this report or any third party in any way whatsoever. Cushman & Wakefield shall not be held responsible for and shall be released and held harmless from any decision made together with any risks associated with such decision in reliance upon any expression of opinion in the report. Our prior written consent is required before this report can be reproduced in whole or in part. 2017 Cushman & Wakefield All rights reserved. www.cushmanwakefield.com
Shenzhen SHENZHEN RETAIL Economic Indicators Prime Average Retail Rents Q1 2017 Significant Q1 2017 Store Openings Q3 16 Q4 16 GDP Growth 8.7% 9.0% CPI Growth 2.4% 2.4% Total Retail Sales Growth 8.1% 8.1% Source: Statistics Bureau for Shenzhen Significant Projects Under Construction Past 12- Month Growth RMB* EURO US$ Q-o-Q 12-Month sq m/mo sf/mo sf/mo Change Luohu 1,633.33 20.4 22.0 1.0% Futian 931.25 11.6 12.6 2.8% Nanshan 892.86 11.2 12.0 0.0% Longgang 550.00 6.9 7.4 0.0% Bao an 540.00 6.8 7.3 5.2% Note: 1 USD = 6.8923 RMB = 0.9275 EUR as of 23 March 2017 * Average rents (RMB/sq m/mo) are based on ground floor in prime locations in major shopping centers, excluding management fee, promotional fee and other fees. Building Location Tenant Area Rainbow Department Store Futian Sp@ce 3,000 sq m Century Place Futian Sundan 2,100 sq m Building Location Area Completion Date Q City Bao an 120,000 2018 Shenzhen Unitown Longhua 180,000 2018 Economy Shenzhen s total retail sales of consumer goods increased 8.1% y-oy to RMB551.3 billion in 2016, up 6.1 percentage points from the previous year. A stable consumer base has supported the city s retail market and related real estate. Market Overview In Q1, retail rent for Shenzhen increased 1.6% q-o-q to average RMB927.0 per sq m per month. Solid property management, coupled with high footfall traffic, has helped to keep rent levels stable on the whole among the city s retail hubs. By submarket, Bao an led the way with 5.2% q-o-q average rent growth following tenant mix adjustments. Average rent increased 2.8% q-o-q in Futian, followed by 1.0% q-o-q growth in Luohu. Rent levels in Nanshan and Longgang were flat for the quarter. Shopping malls in Shenzhen have been actively shifting their brand mix and performing upgrades to cope with an increasingly competitive market and changing consuming needs. Besides offering more commonplace retail elements like skating rinks and gyms, malls are introducing other experiences like badminton, table tennis, bowling, fencing, rock climbing, archery and boxing. Despite fierce competition, movie theaters continued to expand in both core and suburban areas. Elsewhere, online domestic retailers increasingly have opened new concept stores and flagships in shopping malls. These stores are used for promotional purposes, to offer higher quality products and to provide a better customer experience amid declining satisfaction with online shopping portals and electronics malls. To attract mall customers, F&B stores have grown more focused on food trends and providing delicacy, health and specialty items. Shenzhen is expected to add 10 shopping malls, at a total of 1.42 million sq m, in 2017. Around 60% of the new supply will be delivered in non-core submarkets to leverage rapidly rising consumption patterns there. Core submarkets should remain attractive for retailers. One Avenue Futian 150,000 2018 MixC Qianhai Nanshan 80,000 2018 cushmanwakefield.com
Shenzhen Contact Cheng Jia-long South & West China Tel: +86 755 2151 8188 jialong.cheng@cushwake.com Duke Zhen Director General Manager of Retail Services, China Tel: +86 10 8519 8228 duke.sq.zhen@cushwake.com James Shepherd Research, Greater China Tel: +86 21 2208 0769 james.shepherd@cushwake.com Zhang Xiao-duan Director Head of South & West China Research Tel: +86 755 2151 8116 xiaoduan.zhang@cushwake.com About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop and live. The firm s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. In Greater China, the firm has a co-branded presence under the name of Cushman & Wakefield and operates 20 offices in the region. Cushman & Wakefield is among the largest commercial real estate services firms with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management, project management, tenant representation and valuation & advisory. To learn more, please visit www.cushmanwakefield.com. Disclaimer This report has been produced by Cushman & Wakefield for use by those with an interest in commercial property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Wakefield believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman & Wakefield shall not be liable to any reader of this report or any third party in any way whatsoever. Cushman & Wakefield shall not be held responsible for and shall be released and held harmless from any decision made together with any risks associated with such decision in reliance upon any expression of opinion in the report. Our prior written consent is required before this report can be reproduced in whole or in part. 2017 Cushman & Wakefield All rights reserved. cushmanwakefield.com
Hong Kong HONG KONG RETAIL Economic Indicators High Street Average Rents Q1 2017 Vacancy in High Street Significant Q1 2017 Store Openings Q3 16 Q4 16 GDP Growth 2.0% 3.1% CPI Growth 2.7% 1.2% Private Consumption Growth 1.2% 3.2%* Unemployment Rate 3.3% 3.3% Source: Census and Statistics Department, y-o-y changes HKD /sf/mo EUR /sf/mo US$ /sf/mo Q-O-Q Causeway Bay $1,799 214.93 US$231.62 0.0% Tsim Sha Tsui $1,662 198.57 US$213.98-1.4% Central $973 116.25 US$125.27-3.0% Mongkok $550 65.71 US$70.81 0.2% Note: US$/HK$ = 7.767; /HK$ = 8.370 as at 23 March 2016 Q4 16 Q1 17 12-Month 12-Month No. of Vacant Shops Q4 16 Causeway Bay 0.0% 2.6% 1 Tsim Sha Tsui 2.4% 2.4% 2 Central 4.3% 5.7% 4 Mongkok 9.4% 15.1% 8 Location Shop on G/F, 28 Russell Street, Causeway Bay Shop A on G/F, Imperial Building, 54 66 Canton Road, Tsim Sha Tsui Trade * preliminary figure Area (Saleable) Unit Rental Cosmetics 360 sf HK$2,222 Accessories 732 sf HK$1,844 Economy Hong Kong s GDP increased 3.1% y-o-y in Q4, resulting in 1.9% y-oy growth for 2016. The economic pick up was also witnessed in consumption, with preliminary figures for the quarter showing growth of 3.2% y-o-y. Recent retail sales and tourist arrival data also point to some stabilization in Hong Kong s retail market. As of the end of January, tourist arrivals have posted two consecutive months of gains y-o-y, following steep declines for much of the past two years. Retail sales, while still down in January by 0.9% y-o-y, were much improved over the double-digit declines seen in the first half of 2016. Market Overview While rentals across the city s four major shopping areas edged down an average of 2.0% q-o-q, there were signs that the market is at last stabilizing. Notably, rentals remained level in two of the city s core shopping areas of Causeway Bay and Mongkok in Q1. The mass retail sector was the most active in the quarter with brandname cosmetics, fashion accessories and sportswear retailers a major source of take-up. Among them, Under Armour leased a new storefront in Kwun Tong. F&B establishments also remained active, with continuing interest in this sector being seen from PRC chains as mainland hotpot restaurant Haidilao opened its first branch in Hong Kong in Q1, in Yau Ma Tei. Meanwhile, the luxury and jewelry sectors remained under pressure, although some brands began to take advantage of lower rent to open new stores. In a recent example, Elegant Watch and Jewellery leased 5,000 sf in Henry House in Causeway Bay as a new flagship at a 40% discount from the previous lease. Vacancy levels, while up slightly, remained relatively low in most retail areas in Q1. The one exception was Mongkok, where the vacancy rate increased 5.7 percentage points q-o-q to 15.1%. This was, in part, the result of strategies by some landlords to offer shortterm leases during the festive months to seasonal retailers, which have now expired. Improving market sentiment is expected to continue to lend stability to the market with little change in rentals forecasted in coming months. Meanwhile encouraging signs in the economy should give potential occupiers confidence in taking up space in the near term. Shop on G/F & 1/F, 28 30 Argyle Street, Mongkok Fashion 1,873 sf HK$534 Kevin Lam Executive Director Head of Business Space, Hong Kong 16/F, Jardine House, Central, Hong Kong Tel: +852 2507 0507 kevin.yw.lam@dtzcushwake.com James Shepherd Research, Greater China 1366 Nanjing West Road, Shanghai Tel: +86 21 2208 0769 james.shepherd@dtzcushwake.com Reed Hatcher Director Head of Research, Hong Kong 16/F, Jardine House, Central, Hong Kong Tel: +852 2956 7054 reed.hatcher@cushwake.com www.cushmanwakefield.com
Hong Kong About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop and live. The firm s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. In Greater China, the firm has a co-branded presence under the name of Cushman & Wakefield and operates 20 offices in the region. Cushman & Wakefield is among the largest commercial real estate services firms with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management, project management, tenant representation and valuation & advisory. To learn more, please visit www.cushmanwakefield.com. Disclaimer This report has been produced by Cushman & Wakefield for use by those with an interest in commercial property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Wakefield believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman & Wakefield shall not be liable to any reader of this report or any third party in any way whatsoever. Cushman & Wakefield shall not be held responsible for and shall be released and held harmless from any decision made together with any risks associated with such decision in reliance upon any expression of opinion in the report. Our prior written consent is required before this report can be reproduced in whole or in part. 2017 Cushman & Wakefield All rights reserved. www.cushmanwakefield.com
Taiwan TAIWAN RETAIL Economic Indicators Q3 16 Q4 16 GDP Growth 2.1% 2.9% CPI Growth 0.7% 1.8% Past 12- Month Growth Economy Retail sales increased 4.7% y-o-y to NT$1,204.7 billion (US$39.52 billion) in 2016. Supermarket sales led the way by category at a 9.3% y-o-y pickup, followed by convenience stores and retail warehouses at 4.7% and 4.6% y-o-y, respectively. Department store sales increased 4.5% y-o-y with the help of annual sales promotions. Source: Directorate-General of Budget, Accounting and Statistics Sales of General Merchandise Sales of General Merchandise (NT$bn) Prime Average Retail Rents Q1 2017 Note: Only street front shops are taken into account. All data are based on gross floor area unless otherwise specified. Rentals are exclusive of management fees and other outgoings. 1 ping = 35.58 sq ft = 3.3 sq m Note: NT$/US$ 30.4840; NT$/ = 32.8678 as at 23 March 2017 Significant Q1 2017 Store Openings Retail hub Location Tenant Significant Projects Under Construction Area (ping) Ximen Emei St. Momentum 186.98 Zhongxiao Zhongxiao Vacancy Rental Range Rental Range 12-Month Rate (NT$/ping/mo) (US$/sq ft/mo) Zhongxiao 5.1% 15,000 20,000 13.8 18.4 Taipei Railway Station Zhongshan/ Nanjing 5.8% 9,000 13,000 8.3 12.0 6.2% 8,000 13,000 7.4 12.0 Ximen 2.6% 15,000 20,000 13.8 18.4 Sec 4, Zhongxiao E. Rd. Sec 4, Zhongxiao E. Rd. Project Name District Opening Date Jan Dec 2015 Jan Dec 2016 1,150.5 1,204.7 Jan 2016 Jan 2017 Sales of General Merchandise (NT$bn) 103.3 113.7 Source: Department of Statistics, Ministry of Economic Affairs 6xity8ight 147.1 Meet Fresh 96.36 GFA (ping) Market Overview Vacancy rates tended to rise across Taipei s retail hubs in Q1 as shop spaces opened up pending the move-in by new tenants, increasing 1.0 and 1.5 percentage points q-o-q in Zhongxiao and Ximen, respectively. Zhongxiao added sizable occupiers such as French lingerie brand 6ixty8ight and Starbucks. On the other hand, the rent is relatively lower in alleys and has attracted some clothing shops and cafés. Meanwhile, renovation of the LV flagship on Zhongshan N. Rd. was completed and the store reopened in Q1. As sports fashion brands expand their offerings beyond running apparel to ball sports, Taipei s first Nike & Jordan Basketball Experience Store opened in Ximen. The concept store combines retail elements with activities, classic collections displays and customized services. The store is an indication of the extent to which international sports brands are aggressively working to reach consumers in the Taiwan market. Elsewhere, department stores increasingly are opening earlier in the day to sell takeout breakfast targeting office workers in business districts and aiming to boost turnover. These include SOGO s Zhongxiao and Dunhua locations at high-traffic transport interchanges, as well as Breeze at MRT stations Nanjing, Xinyi and Taipei. Another example saw the Uni-President Taipei, which enjoys a connection to a MRT station, offer such casual breakfast stops as Sarabeth s, Tim Ho Wan and TGI Fridays. Ahead, fast fashion brands appear to be growing out of favor with department stores, which had successfully wooed a flood of international brands in recent years with large retail spaces, lengthy leases and other incentives. But as fast fashion brands increasingly develop their online shopping business to shrink their traditional footprint and lower operational costs, department stores are considering adjustments to their leasing strategy for such brands. ATT 4 FUN Zhongshan Dist., Taipei City Q3 2017 - cushmanwakefield.com
Taiwan Contact Billy Yen Head of Taiwan Tel: +886 2 8788 3288 billy.pl.yen@cushwake.com Wendy Hsueh Director Head of Consulting and Research Taiwan Tel: +886 2 8788 3288 wendy.hj.hsueh@cushwake.com James Shepherd Research, Greater China Tel: +86 21 2208 0769 james.shepherd@cushwake.com Charlie Yang Director Head of Valuation & Advisory Services Taiwan Tel: +886 2 8788 3288 charlie.ct.yang@cushwake.com Jessie Lee Associate Director Head of Agency Department Taiwan Tel: +886 2 8788 3288 jessie.cc.lee@cushwake.com About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop and live. The firm s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. In Greater China, the firm has a co-branded presence under the name of Cushman & Wakefield and operates 20 offices in the region. Cushman & Wakefield is among the largest commercial real estate services firms with revenues of $5 billion across core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management, project management, tenant representation and valuation & advisory. To learn more, please visit www.cushmanwakefield.com. Disclaimer This report has been produced by Cushman & Wakefield for use by those with an interest in commercial property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Wakefield believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman & Wakefield shall not be liable to any reader of this report or any third party in any way whatsoever. Cushman & Wakefield shall not be held responsible for and shall be released and held harmless from any decision made together with any risks associated with such decision in reliance upon any expression of opinion in the report. Our prior written consent is required before this report can be reproduced in whole or in part. 2017 Cushman & Wakefield All rights reserved. cushmanwakefield.com