retail hotspots in asia pacific

CBRE Global Research & Consulting

2013 Year End Review

RETAIL HOTSPOTS IN ASIA PACIFIC

This report examines new store openings by retailers entering a market in Asia Pacific outside their home country

for the first time and covers the first three quarters of 2013. The previous report covered the full year 2012.

FOREWORD

kEY FINDINGS

• Developed markets such as Hong Kong and Tokyo remained the preferred entry point for retailers in Asia Pacific, particularly for retailers in the luxury and business category.

• Emerging markets in Greater China and Southeast Asia drew growing interest from retailers on the back of the steady new supply of prime retail space and growing consumer spending.

• Retailers from North America and Europe continued to lead expansion across the region with the top five countries of retailer origin (United States, Italy, United Kingdom, France and Japan) all unchanged from 2012.

• Mid to high-end fashion retailers accounted for the largest portion of new arrivals but the year saw luxury retailers adopt a more cautious strategy in mature markets. New F&B retailer arrivals held firm as consumers remained keen to spend on entertainment-based retail.

1 RETAIL HOTSPOTS IN ASIA PACIFIC |

Sector Definitions• Coffee & Restaurants: includes fast food, restaurants, confectionary retailers and coffee shops• Consumer Electronics: includes computing, phones, other electronics and electrical retailers• Homeware & Department Stores: includes DIY, department stores and furniture retailers• Luxury & Business Fashion: includes any luxury retailer from all areas of retailing, including men’s

and women’s luxury clothing/footwear, jewellery and business clothing retailers• Mid-Range Fashion: includes men’s and women’s mid-market and casual fashion retailers• Other: includes all other types of retailers including chemists, pet stores, books, music and DVD retailers• Value & Denim: includes value and discount clothing, and denim retailers• Specialist Clothing: includes general (as opposed to luxury) footwear, underwear, sportswear,

childrenswear and accessories retailers• Supermarkets: includes multiple grocery/convenience stores, supermarkets and hypermarkets

ENTRIES20

HONG KONG

ENTRIES28

SINGAPORE

TOKYO

HANOI

ENTRIES30

TAIPEI

ENTRIES17NEW DELHI

ENTRIES16

BEIJING

ENTRIES27

SEOUL

ENTRIES16

ENTRIES

SHANGHAI

26

MANILA

ENTRIES13

ENTRIES25

2RETAIL HOTSPOTS IN ASIA PACIFIC

TOP CITIES FOR NEW RETAILERS ENTRIES

Asia Pacific continued to see a steady flow of new retailer

openings in 2013 amid steady economic growth and

generally positive consumer sentiment.

International retailers continued to focus on opening

stores in Hong Kong (28 new entrants) and Tokyo

(20) as a first step towards entering other markets in

the region. Leasing demand for space in prime areas

remained strong despite high rents in many cities.

However, the limited availability of quality retail space

in core locations continued to pose a barrier to new

retailer entry in a number of key cities.

The retail scene in emerging markets, particularly

in Southeast Asia, continued to mature rapidly with

the completion of high quality new retail space and

increasingly sophisticated consumers, which spurred the

arrival of new retailers from overseas. Hanoi recorded

the highest number of new entrants of any city in Asia

Pacific in 2013 (30) while Manila (13) was also among

the top 10. In India, demand from international retailers

in New Delhi (16) was stable as more groups sought

space in prime shopping centres as opposed to high

street shops.

Greater China continued to be a key location for

expansion by international retailers as the completion of

high quality new retail supply attracted a wave of new

openings. Beijing (27) and Shanghai (26) remained

the most popular cities in the country whilst Hangzhou

(19) was also in the top 10 regionally. Taipei (17) and

Seoul (16) also saw more new names this year although

the bulk were major international retail groups with

established store networks across the region.

Established Market

Maturing/Emerging Market

3 RETAIL HOTSPOTS IN ASIA PACIFIC

The top five countries of

retailer origin were unchanged

from 2012. Retailers from the

Americas remained the most

active with 71 new entries across

Asia Pacific in 2013. Retailers

from Italy (47), the United Kingdom

(40) and France (37) were also very active,

particularly in the luxury and mid-range fashion sector.

Japan (24) completed the top five. Among retailers from

NEW RETAILERS ENTRIES BY ORIGIN

RETAILER COUNTRY OF ORIGIN

JAPANRANk 2013

#5

SINGAPORERANk 2013

#9CANADA

RANk 2013

=10SwEDEN

RANk 2013

=10

SPAINRANk 2013

#6HONG kONG

RANk 2013

#7kOREA

RANk 2013

#8

UNITED STATESRANk 2013

#1ITALy

RANk 2013

#2UNITED kINGDOM

RANk 2013

#3FRANCE

RANk 2013

#4

Asia Pacific markets, Coffee

& Restaurants, Specialist

Clothing and retailers in

the “Other” category were

most active in expanding

across the region. Retailers from

Japan and Hong Kong entered

several new markets while Korean and

Singaporean retailers were also active.

26%

AMERICAS

20%

ASIA PACIFIC

54%

EMEA


NEW mARkET ENTRIES BY RETAIL SECTOR

Luxury and business retailers accounted for 26% of

new entrants in the region in 2013, the same figure

as in 2012. Mid-range fashion retailers comprised

just over 21% of new entrants compared to 18% last

year whilst retailers of specialist clothing, particularly

footwear and underwear, accounted for 16% of new

entrants, compared to 12% last year. The Coffee &

Restaurants category also improved its share on

a yearly basis but the proportion of new entries by

Value & Denim retailers declined to 8.5% compared

to 11% a year previously. There were no new entrants

in the consumer electronics sector. Other sectors were

largely unchanged on a yearly basis.

Coffee and Restaurants

26%

14%16%

5%8%

21%

9%

1% 0%

Homeware andDepartment Store

Luxury and Business

Value and Denim

Supermarket

mid-Range Fashion

Other ConsumerElectronics

Specialist Clothing

23

0

5

10

15

20

25

30

35

40

45

50

55

60

55

27

38

19

2

30

LUX

URY

AN

D B

USI

NES

S

MID

-RA

NG

E FA

SHIO

N

SPEC

IALI

ST C

LOTH

ING

21

15

VA

LUE

AN

D D

ENIM

18

25

CO

FFEE

AN

D R

ESTA

URA

NT

79

HO

MEW

ARE

AN

D D

EPA

RTM

ENT

STO

RE

9

17O

THER

SUPER

MA

RK

ET

5 RETAIL HOTSPOTS IN ASIA PACIFIC

Established City Maturing/Emerging City

Around 70% of new market entries in Asia Pacific were

in emerging markets and 30% in developed markets,

compared to a half/half share in 2012. Luxury &

Business Fashion retailers entering the region for the

first time continued to opt for Hong Kong or Tokyo as

the location for their first store. In comparison, groups

already established in Asia Pacific focused on expansion

in emerging cities. Seoul and Taipei were the subject

of increasing interest but the spotlight remained on

emerging locations in China, India and Southeast Asia.

Mid-Range Fashion and Specialist Clothing retailers,

in particular footwear and underwear, were active in

in Greater China and North Asia. Fast fashion labels

NU

MBE

R O

F N

EW M

ARKE

T EN

TRIE

S

introduced more sister or secondary brands and also

opened stores in secondary cities in China and Japan.

Value & Denim retailers were active in the same locations

but new openings in developed markets by retailers in

this category declined compared to the previous year.

More retailers planning entry to new markets were

forced to wait for the right space to become available

due to the lack of supply in prime areas. Others opted

to make their debut in other cities. Retailers in the Coffee

& Restaurants category continued to expand over the

course of the year. However, Asian groups tended to

focus on developed markets whilst emerging locations

saw more activity by retailers from the Americas.

NEW RETAILER ENTRIES BY SECTOR & CITY mATURITY

OUTLOOk

The outlook for the Asia Pacific economy remains relatively positive. Domestic consumption is solid in most parts

of the region and consumer sentiment remains healthy, albeit clouded to a certain extent by economic uncertainty

in the United States and Eurozone. Retail sales are expected to continue to see positive growth in 2014 but at a

slower rate compared to 2013.

Retailers already established in the region, particularly those in the Mid-Range Fashion category, will continue

to focus on emerging markets in Southeast Asia including Indonesia, Thailand, the Philippines and Vietnam for

new market entry and expansion given continued growth in domestic consumption and the rising middle class

populations. Taiwan and Australia will also be a major focus. Groups new to the region will continue to prefer

Hong Kong, Singapore and Tokyo as their first port of call, although the lack of new prime retail supply will continue

to inhibit leasing activity to a certain extent. India will continue to see some activity although the rate of entry could

be slowed by complications surrounding new legislation regarding foreign direct investment in multi-brand retail.


© 2013, CBRE, Group Inc. CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

ASIA PACIFIC RESEARCH CONTACTS

COUNTRy CONTACTS

Nick Axford Global Head of ResearchT: +852 2820 8198E: [email protected]

Jonathan HsuDirector, Asia PacificT: +852 2820 2957E: [email protected]

Liz HungManager, Asia Pacific T: +852 2820 6557E: [email protected]

ASIA PACIFIC RETAIL CONTACTS

Australia & New ZealandAlistair PalmerNational DirectorRetail ServicesT: +61 2 9333 3396 E: [email protected]

AsiaSebastian SkiffExecutive DirectorRetail, AsiaT: +852 6335 2023 +86 156 260 79333E: [email protected]

CONTACTS

*Part of the CBRE Affiliate Network

China Hsiang-yun Chu Senior DirectorRetail ServicesT: +86 21 2401 1322 E: [email protected]

Joel StephenDirector Retailer RepresentationT: +86 21 2401 1375 E: [email protected]

kenith kongDirectorRetail ServicesT: +86 10 8588 0706 E: [email protected]

Hong kongJoe LinExecutive DirectorRetail Services T: +852 2820 2860 E: [email protected]

Neil HowardAssociate DirectorHong KongT: +852 2820 1437E: [email protected]

India Vivek kaulHead of Retail ServicesIndiaT: +91 12 4465 9856E: [email protected]

Indonesia*Hendra HartonoCEOPT. Leads Property Services T: +62 21 2903 5111E: [email protected]

JapanShina FukuiSenior AssociateTokyoT: +81 3 5470 8878E: [email protected]

yuki NakamuraAnalystT: +81 3 5470 8436E: [email protected]

Malaysia*Allan SooManaging DirectorMalaysiaT: +603 2092 5955 E: [email protected]

Philippines*Joanie L. MitchellDirectorT: +632 752 2580 E: [email protected]

SingaporeLetty LeeDirectorRetail ServicesT: +65 6326 1230 E: [email protected]

South koreaAiden Hwang Associate DirectorRetailer RepresentationT: +82 2 2170 5866 E: [email protected]

TaiwanDories Lu Associate DirectorRetail Services, TaiwanT: +886 2 7706 9526E: [email protected]

Thailand*Jariya ThumtrongkitkulSenior ManagerRetail and Industrial Services, Thailand T: +66 2 654 1111 ext. 221 E: [email protected]

Vietnam & Cambodia*Richard Leech Senior DirectorRetail ServicesT: +84 4 2220 0220E: [email protected]

retail hotspots in asia pacific

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