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Tokyo Top Market for Retailers Entering Asian Market

Tokyo Top Market for Retailers Entering Asian Market


According to a new report by CBRE, Tokyo cemented its lead as the top destination in the APAC region for market entries by international retailers, as cities in Asia Pacific saw 464 new retail entrants in 2014--23% more than in 2013.
 
CBRE reports that Tokyo saw the most new retail entrants (63), followed by Singapore (58), Taipei (49), Hong Kong (45) and Beijing (34).
 
In addition, the Luxury and Business sector saw the greatest share of new entrants at 22.6%, but the biggest climber was the Coffee and Restaurants sector with 22.4% in 2014, compared to just 14.8% in 2013.
 
Retailers from the US made the most new entries into Asia Pacific with 24%, followed jointly by Italy and the UK with 11%, then French retailers at 10.5%. Japan was the top APAC entrant ranking fifth place, with 6.9% of the new market entries being Japanese retailers.
 
Jonathan-Hsu-2.jpg

Jonathan Hsu

Jonathan Hsu, Head of Occupier Markets Research, CBRE Asia, commented, "International retailers have long looked to establish themselves in Asia Pacific, by first setting up in more mature markets such as Japan or Hong Kong, before using this as a base to launch into other markets in the region. In 2014, Tokyo cemented its lead as the top destination in APAC for market entries by international retailers. The attraction of this as a gateway market was driven by the growth in domestic consumption off the back of Japan's economic rebound; anticipation around the 2020 Tokyo Olympics; as well as the robust growth in tourist arrivals. Demand here has been highly concentrated in core shopping districts."
 
Hsu further commented, "As gateway markets, Singapore and Hong Kong have received a lot of international interest and will continue to attract interest from new brands. However, retailers in Hong Kong will need to adjust to weaker demand of luxury goods from Mainland Chinese tourists, whilst the ongoing labor crunch remains a key concern for retailers looking to expand in Singapore."
 
"The influx of international fast fashion brands and luxury groups into Sydney and Melbourne spurred the strong rental growth of prime CBD retail space. To accommodate high demand for flagship stores from new retail entrants, Sydney will continue to see active asset enhancement activities in its prime districts. Retailers' attention to difference in the Pacific, and tailoring the product mix to match local consumer needs will help improve integration success", concluded Hsu.
 
Joel Stephen, Head of Retailer Representation, CBRE Asia, also commented, "Drawn by factors such as the region's expanding middle class and urbanization, overall demand from international retailers looking to open stores in Asia Pacific remained strong in 2014. In the last year, we've seen some interesting dynamics emerging, especially with regards to Japan and Australia. As international retailers start establishing themselves in those markets, more domestic players are looking overseas--local markets are becoming more competitive due to limited availability, especially in high street retail space."
 
"In 2015, we're expecting a growth in retail sales across the region, albeit with a more cautious approach from retailers. They will be more strategic in store network planning, focusing on proven retail environments. In terms of retailer sectors, CBRE expects that affordable F&B will remain the most active across the region. Asia Pacific consumers thrive on new concepts and landlords are keen to create destinations by offering more dining options. Expansion demand of the luxury sector will be led by smaller brands from big groups, and new brands to the region. Their profile will be more diverse and will plan for a smaller scale expansion, thus demand will be focused on developed markets such as Japan, Singapore, Hong Kong and Australia, with China less of a priority due to the ongoing anti-corruption campaign.
 
"Other active sectors in Asia Pacific include bridge brands and specialized retailers like lingerie and sportswear, and we should see more of a focus on in-store experience and service. Value fashion will focus on strengthening their presence in underpenetrated markets like Australia and Taiwan and highly populated markets like China, India and emerging Southeast Asia", concluded Stephens.

WPJ News | Retail Hotspots in Asia Pacific Region in 2014


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