Shopping centers doing well despite flat rents

Source: Xinhua | 2019-06-13

Growth of shopping centers was largely positive last year but dipped from a year earlier due to flat rents at lower-tier cities, a recent study says.

The overall development index for shopping centers stood at 64.5 points, down 4 points from a year ago but still in the positive range above 50, according to a joint report by the China Chain Store & Franchise Association and commercial real estate consultancy CBRE.

CCFA chairman Pei Liang told the China Shopping Center & Chain Brand Development Summit that shopping centers need to offer unique value that is not available at stand-alone or other types of stores.

“Operators need to help merchants operate and attract more foot traffic, such as offering logistic services for food and beverage vendors,” he noted.

Occupancy rates at second- and third-tier cities have not improved in the past year, but cities like Shanghai and Beijing still have a huge attraction to brands opening brick-and-mortar stores.

Shopping outlets are the most popular category, with the top 20 domestic outlet operators recording a 25 percent sales increase to 51 billion yuan (US$7.4 billion).

As for the market outlook, up to 60 percent of landlords remain cautiously optimistic on rent increases and revenue.