China’s neighbourhood malls a bright spot in sluggish retail sector
Suburban malls, which serve the everyday needs of residents, offer opportunities for growth despite wider softening in retail sales
While operators of luxury shopping centres in China are scratching their heads for ways to attract affluent buyers, property consultants say one-stop neighbourhood shopping malls have become bright spots in the industry.
There are many such retail centres in the suburbs of Beijing and Shanghai, as well as in some 1.5 tier cities, said Steven McCord, head of research for JLL North China. These malls mainly serve the everyday needs of residents in local neighbourhoods, with amenities such as restaurants and entertainment facilities.
“They are a one-stop shop [where] people can get what they need. These malls are close to where they live so the need to go to city centre is less frequent,” said McCord.
Some neighbourhood malls that opened in the last two years include Jinyu Vanke Square, BHG Lippo Mall and Livat (Ikea Xihongmen).
Property consultants said tenants might consider these malls as business opportunities.
The juxtaposition of a building boom amid softening retail sales growth has sparked concerns about an oversupply of retail space in China.