Food, beverage retailers drive up Shanghai's commercial property demand
Demand from food and beverage retailers for space has boosted Shanghai's commercial property demand in the first half.
According to global property services provider CBRE, retail demand has pushed up shopping space upgrades and renewals in the city, and an estimated new retail property supply of 490,000 square meters is projected in Shanghai in the second half of this year.
New brand launches and restaurant openings, which accounted for 45 percent of retail property leasing demands in the first half, have improved the retail environment. Fashion and apparel vendors were next.
According to the city's commerce commission, 375 merchants and leisure businesses established their first presence in Shanghai in the first four months of this year.
As Shanghai strives to become a worldwide consumption center, city and district officials are promoting new store openings and new brands to enter the local market to unleash consumption momentum.
CBRE said that the citywide retail vacancy rate was 7.6 percent, down 0.4 percentage points from the end of the previous year.
The top categories that have been active in developing a physical presence to satisfy rising consumer demand include Chinese-style cuisine, coffee and tea drinks, and bakery.
Ground floor leasing charges at large shopping complexes have steadied at 34 yuan per square meter per day because of the modest rebound in overall sentiment.
Kelly Hu, CBRE's Director of Retail Advisory and Transaction Services, said foreign retail companies are optimistic about the retail landscape in Shanghai, and a wide spectrum of international brands are actively researching good locations to enter the city.
She noted that a wide range of multinational companies have been actively researching ideal locations for their stores, with a strong preference for mature and core retail malls in the downtown. They have taken a cautious approach in terms of store location.
Holiday spending and tourism expenditure have offered solid support for retail recovery in the first half, according to the report.
To improve the shopping experience, new and rising commercial zones such as Putuo District's Zhenru region and the Pudong New Area's Qiantan zone are slated to debut new retail spaces in the second half.
