Luxury malls in Beijing, Shanghai slash rents, change tenant mix as consumer spending dips
Mall vacancy rates in Beijing stood at 10.6 per cent last year and 9.5 per cent in Shanghai, according to Cushman & Wakefield
A slowdown in Chinese consumer spending on luxury goods is affecting high-end malls in Beijing and Shanghai, with shopping centres like Parkview Green and K11 slashing rents and courting mid-market retailers to attract middle-class shoppers and stem rising vacancy rates.
Shanghai K11, an 11-year-old luxury mall owned by the family of Hong Kong billionaire Henry Cheng Kar-shun, was easing its tenant criteria as rental income continued to fall, a source told the Post, declining to provide details on rents.
In Beijing, Parkview Green, a landmark shopping complex in the central business district known for its pyramid-like structure and extensive art collection, announced in March that it planned to attract more diverse restaurant operators to “reignite its commercial potential” following the exit of high-end brands like Rolex and Ermanno Scervino.
Hong Kong’s Parkview Group, the property’s owner, put it up for sale last December as it struggled with high mortgage payments and lacklustre occupancy rates, according to a Bloomberg report.
“What Parkview Green represents is a type of property that was once positioned as premium, but with the challenges facing high-end consumption in China today, its brand structure and tenant mix need to be adjusted,” said Tin Sun, northern China head of research at CBRE.