Asian Cities Dominate Top Ten Global Markets in Development and Completions
According to a new global report CBRE, the worldwide shopping center development pipeline has continued to increase, reaching 41.9 million square meters in 2015, from 39 million square meters in 2014, and with Asian cities dominating all of the top ten most active global markets.
The report, measuring shopping center development in 168 major cities globally, highlights that China remains the most active market in terms of delivering new space, accounting for two-thirds of construction globally. Chongqing, Shenzhen, Chengdu and Shanghai all have over three million square meters of space under construction in over 30 projects in each city.
Across Asia Pacific, new development is active in 34 of the 41 cities surveyed, totaling 34.8 million square meters Outside of China, activity in Thailand and India is also robust. Bangkok is the only other market in Asia within the top ten most active development markets, with 1.7 million square meters of space under construction.
Across the board, completions of shopping centers globally have started to slow as parts of the global retail market experience an imbalance between supply and demand. Globally 10.6 million square meters of new space opened in 2015, down from 12.1 million square meters in 2014.
Asia Pacific remains the most active in terms of completions with 7.8 million square meters completed in 2015--dominated by China which accounts for over six million square meters of completions. China's Wuhan saw the largest volume of completions globally with just under 800,000 square meters of new space added in 2015. In India, New Delhi's completion of the DLF Mall in NOIDA ranked as the largest shopping center completed in Asia Pacific this year with a total area of 183,948 square meters
"Shopping center development remains active across Asia, yet the notable change we see is the slowdown of shopping center completions, typically in markets where there are already high levels of saturation and weakening demand," commented Joel Stephen, Senior Director and Head of Retailer Representation, CBRE Asia.
"The large volume of new supply, complemented by the growth of e-commerce, will make it challenging for landlords to attract and retain quality tenants, especially in China where supply will be most abundant. With competition becoming fiercer, landlords' operational expertise will be the key to success. Retailtainment, which includes experiential retailing, food and beverage, and leisure services, is the driving force in attracting footfall to shopping centers and increasing shoppers' dwell time. Landlords are advised to reinvent their shopping centers to be the ideal place for leisure and social activities. This process, often called 'placemaking', will require landlords to invest in events, marketing and the quality of operation, as well as restructuring their tenant mix, to align with current shopping trends appropriate for that catchment," added Mr. Stephen.
Global Shopping Center Completions in 2015 (Source CBRE)
Global Shopping Center Space Under Construction in 2015 (Source CBRE)