China led the world in new shopping space in 2013 with nine of the ten leading cities for new mall completion coming from China, according to a recently published report.
The study by real estate services company CBRE found that Chengdu placed first among cities globally in providing more floor area for its populace to shop, with over one million square metres of new malls opening last year in seven new centres.
Tianjin placed second on the list with 640,000 square metres of new space, and other Chinese cities in the top ten were Shanghai, Chongqing, Shenzhen, Hangzhou, Beijing and Wuhan, in that order. The only non-Chinese city to finish in the top ten spots was Istanbul, Turkey, which finished in ninth place, just ahead of Wuhan.
Chengdu’s accomplishment was helped along to no small extent by the opening of the 1,700,000 square metre New Century Global Centre early last year. Currently the world’s largest building in terms of floor space, the sprawling multipurpose building includes a 400,000 square metre mall, as well as offices, hotels, a university, and – of course – a pirate ship.
Occupancy Levels Holding Up, But for How Long?
The study titled, “Shopping Centre Development – The Most Active Cities Globally,” found that even in Chengdu, “robust occupier demand has ensured stable occupancy levels for prime retail space despite the addition of substantial new supply in non-core areas.” However, the report did find a decline in rental rates in suburban areas, at least in Chengdu.
A market survey earlier this year by rival real estate consultancy Knight Frank revealed that 65 percent of luxury retailers failed to reach their targets for new store openings in 2013, and the mood regarding the retail real estate outlook has generally been gloomy so far in 2014.
China Has More Space on the Way
Landlords unhappy about how things have been going this year should treasure these months as the good times, because according to CBRE’s report, Chinese cities account for over half of all the shopping centre space under construction in the 180 cities they surveyed.
The biggest mall pipeline globally belongs to Shanghai, where 3.3 million square metres of new shopping space is currently underway, which is more than the sum of all the space being built in the 86 European cities surveyed.
Just after Shanghai comes Chengdu with another 3.2 million square metres under construction, and then Shenzhen with 2.7 million square metres and Tianjin with another 2.5 million square metres. Another 6 Chinese cities are due to deliver over one million square metres over the next three years.
That should leave plenty of space for more Zara shops and KFC outlets.