Retail rents rise in big cities

PUBLISHED : Wednesday, 24 May, 2006, 12:00am
UPDATED : Wednesday, 24 May, 2006, 12:00am

Retail rents are on the rise in mainland cities, where increased leasing activity has been noted since the beginning of the year.

Almost every major mainland market registered a quarter-on-quarter rent increase, said property consultants.

With the full liberalisation of the retail sector, foreign businesses had been streaming into the mainland market since early this year, raising the demand - and the rent - for retail space, said property consultant CB Richard Ellis.

In Beijing, there was a quarter-on-quarter increase of 1.7 per cent in average retail rents.

South Korea's E-Mart has set up an outlet in the Wangjing district, and Britain's leading retailer Tesco has secured a place as an anchor tenant in the Dacheng International Centre, due to open soon. Taiwan's Shin Kong Mitsukoshi Department Store has signed a contract to lease space at the China Central Place shopping centre.

In Shanghai, according to CB Richard Ellis, supply was tight in certain prime retail neighbourhoods, especially in the absence of new space coming on the market.

The Lunar New Year in early February gave an extra boost to an already buoyant market. Transactions by more than 300 medium to large retailers during the holiday period came to 2.78 billion yuan, according to the Shanghai Economic Committee. This represented a growth of 7.9 per cent over the same period last year. The city's average retail rent for prime ground floor units increased by 2.4 per cent, quarter on quarter, in the first quarter of this year.

In Guangzhou, more than 22,000 square metres of prime retail space was snapped up in the first three months of the year. Rents for ground and first-floor prime retail properties increased 6.5 per cent and 6.9 per cent respectively, quarter on quarter.Peggy Sito