China’s shopping mall operators warned of looming ‘lost decade’; rental prospects dim as shoppers head online
China’s shopping mall operators are grappling with the question of how to raise leasing rates among a tenant base squeezed by online retailing
Shopping mall operators on the mainland are bracing for a difficult decade as their retail tenants continue to lose market share to online vendors, suggesting little room to push up leasing rates in line with historic trends, according to a major Hong Kong based developer.
Henderson Land Development vice chairman Peter Lee Ka-kit, the eldest son of Hong Kong’s second-richest man Lee Shau-kee, said rental pressure on shopping malls would persist.
“There are already fewer visitors going to shopping malls in remote areas,” Lee said at a Hong Kong forum last month.
And with advertising now increasingly switching over to online and mobile, Lee added that income from shopping malls will continue to suffer because retailers would turn to China’s tech giants Baidu, Alibaba and Tencent, rather than renting physical space in a shopping mall.
“In the next 10 years, we are not hopeful that we can raise rental rates,” he said. “It will have a serious impact on our income.”
Henderson Land owns 91 million square feet of office and shopping malls in 14 mainland cities.