New retail space aplenty in city this year
More than one million square meters of new retail space will be added to the local market this year following massive project delays over the past year, primarily due to the pandemic, according to data released by major international property consultancies.
"Full-year new supply reached a 10-year low of only 243,000 square meters last year after more than 60 percent of planned projects were delayed," said Ellen Wei, head of retail for JLL China. "Large planned developments and slow leasing of new projects will put additional pressure on the decentralized market in 2021, while the prime market will fare better with limited new supply and active leasing."
According to a recently released Savills report, 12 new retail projects totaling 1.3-million square meters are scheduled to open in the city this year, half larger than 100,000 square meters. Officials at CBRE said new retail space in non-prime locations alone will exceed 1-million square meters over the next 12 months.
While abundant new space and deep-pocketed e-commerce companies that frequently offer big discounts to woo consumers may make cut-throat competition inevitable, offline counterparts are finding new ways to boost foot traffic and revenue.
Taikoo Li Qiantan, a 50-50 retail complex developed by Swire Properties and Lujiazui Group, is introducing a wellness-themed experiential shopping concept with a diverse mix of more than 200 stores, spanning high-end retail, trendy fashion, dining, entertainment, health and lifestyle, and arts and culture.
Located in the heart of Qiantan — dubbed Shanghai's "second Lujiazui" — the 120,000-square-meter project, scheduled to open in phases this year, will feature an innovative wellness-themed community hub space on its rooftop. The space will include well-known global lifestyle brands such as Tsutaya Books, and others making their Chinese mainland debuts like MOViE MOViE — the cultural and lifestyle cinema brand from Broadway Cinemas — and a running station from Japan's ASICS.
"As Swire Properties' third Taikoo Li development, Taikoo Li Qiantan has been carefully planned around the wellness concept in terms of site selection and architectural and landscape design," said Han Zhi, director of retail at Swire Properties. "We're working with a number of high-quality brands to create a rooftop social space that combines healthy living, arts and culture, sports and leisure, and dining and entertainment."
Tenant upgrades to attract more influential and trendy brands aided the recovery of offline retail businesses, with outdoor sports, yoga and running shoe brands actively expanding. Other sectors, including beauty, automotive and designer toys, also maintained strong leasing momentum over the past 12 months, according to JLL.