In the first half of 2023, China's total retail sales of consumer goods increased by 8.3% year-on-year (y-o-y). Along with the upturn, we expect the retail market in Greater China to remain buoyant for the rest of the year.
By Q2 2023, the total prime retail property stock in the core markets in the 16 major cities in Greater China we track totaled 106.0 million sq m. In China, many international and domestic brands either opened their first store or accelerated their expansion, demonstrating an increasing demand for retail space in the market. The total premium core city retail property net absorption across the Greater China market for the half year was 2.66 million sq m. With most mid- to high-end shopping centers remaining attractive to many retailers, the overall vacancy rate in the 16 major cities in Greater China decreased to 11.01% in Q2 2023.
China's retail property market is and will continue to be a popular investment destination for investors, developers and retailers, given the measures from the central and local governments to stimulate consumption, Chinese consumers’ continual pursuit in upgrading the goods that they buy, the launch of retail property C-REITs, and the general sustainable development within the overall retail industry.
In order to cater to the changing market and increasingly diversified needs of Chinese consumers, shopping center owners and retailers will continue to try to broaden the consumption market and innovate new business models and retail concepts. In terms of demand, the main focus trends this year are as follows:
- The general boosting of consumption
- Pop culture-driven development
Looking at the individual major cities in Greater China, prime retail property market demand performance in H1 2023 generally turned out to be better than expected. Into H2 2023, we expect a number of factors, including a series of pro-consumption policies and individual city initiatives, to drive retail market growth.