Retail Market Insights

February 22, 2024 / By ,

Despite slowdown in some markets, Asia Pacific’s retail market remains healthy

While the post-pandemic recovery continued to drive retail activity in the Asia Pacific region during the quarter, momentum is beginning to show signs of slowing in some markets. A rebound in international tourist arrivals remained a key tailwind in helping boost footfalls and sentiment around the region. Experience-oriented sectors such as F&B and entertainment persisted as major demand sources. Meanwhile, an inflationary environment, a petering out of pent-up demand and outbound travel are some of the factors contributing to the slowing of the retail recovery momentum.

The aggregate Asia Pacific Retail Rental Index continued to marginally increase for a third consecutive quarter, indicating a sustained recovery in the market after three years of rental declines.

Greater China

In Hong Kong, consumption leakage due to northbound and outbound travels cast a shadow on the retail market, while leasing was mainly supported by mass-to-mid-end trades, such as pharmacies and light refreshment shops. Retail rental growth in Hong Kong further moderated in the quarter due to softening consumer sentiment, alongside less favourable prime retail space in the market.

Retail leasing in Shanghai was steady as consumption continued to recover and more landlords offered rental concessions, with active leasing demand from the sports apparel retailers, perfume brands, boutique fitness clubs, children’s entertainment venues and beverage and bakery shops. Average rents in the prime area remained flat, while in the decentralised market, rents declined as landlords sought to attract tenants.

Starting from October 2023, Beijing has witnessed a pick-up in consumption, boosting market sentiment. Retail leasing enquiries increased across the city, with strengthened demand particularly coming from F&B, outdoor and Chinese jewellery retailers. Top malls with leading market performance achieved their annual rent increase target, helping to drive up rents in the urban market.

In Guangzhou, leasing demand was moderate as retailers remained cautious about store expansions amid a lack of sustained sales momentum; notably, F&B tenants slowed their expansions. Rents in both the urban and suburban submarkets fell as most retailers remained sensitive to operational costs, prompting landlords to adopt more flexible strategies to fill vacancies, including rent reductions and extended rent-free periods.

North Asia

Consumer sentiment in Tokyo stalled, although retail sales continued to grow in part supported by the recovery of tourism arrivals, as major luxury brands drove leasing demand in the city’s prime high streets. Tokyo’s prime high street ground floor rents continued to grow albeit at a slower pace.

Consumer sentiment in Seoul was subdued again, with prime malls’ net absorption turning negative for the first time in a year, and high streets also recording negative net take-up. Rent growth of Seoul’s prime malls and high streets was slightly positive, bolstered by improving floating population and inflationary pressures.

Southeast Asia

In Singapore, healthy domestic consumption and the return of international visitors further underpinned the retail market recovery, and occupier demand for both retail and F&B spaces remained resilient. Singapore rents rose slightly in response to declining vacancy rates, the sustained growth in international visitor arrivals and the healthy workforce foot traffic.

Leasing demand in Bangkok for prime grade malls has outperformed non-prime grade malls, as tenants and consumers seek modern, well-located retail spaces, and evolving shopper preferences for convenience, experiences and amenities drive this shift. Positive retail sentiment has supported rental growth; however, elevated inflation and its impact on operating expenses and the cost of living have limited growth rates.

Jakarta has seen a notable increase in new tenants from the F&B industry, with several international restaurants entering the market; at the same time, the entertainment sector also continued to expand, with a focus on offering more amenities for young adults. Prime mall rents have trended upward, mainly driven by a lack of supply in the retail market and low vacancy rates.

As the peak season took place in Manila, new store openings saw an uptick during the quarter, with the F&B sector leading the way, followed by food and groceries; on the other hand, store closures saw a decline. Retail rents increased over the quarter, as malls became filled during the peak season, giving mall operators a chance to increase rates.


Most of the leasing activity in Mumbai was recorded in a newly completed mall in the prime north submarket, while the suburbs and prime south submarkets also witnessed healthy store openings, with international retailers taking up space across quality malls. Overall rents rose moderately, backed by leasing activity observed in the new mall completion and other quality malls that are operating at high occupancies and high footfall, causing landlords to harden their stance during negotiations.

In Delhi NCR, the suburban submarket reported healthy leasing demand, with several brands securing large spaces in a newly completed mall; active retailers included Brioni and NARS Cosmetics, which opened their first stores in the country. With vacancy levels coming down further, rents in prime malls continued to rise in the quarter.


Leasing evidence remained low in Australia with extended negotiation periods between landlord and tenant a consistent thematic across most tenant categories and markets. Rents remained unchanged in most markets except for growth being recorded in the large format retail sub-sector in Adelaide.

Retail outlook

A more tepid global economic outlook and elevated cost of living issues may weigh on short-term economic momentum in the region. However, a continued healthiness in consumer sentiment, sustained recovery in international tourism, and a general downtrend in inflation should be supportive of the retail market in the region. Leasing activity is expected to maintain its momentum into the new year, boosted by a broad base of sectors including F&B, entertainment, fashion and sports. Hence, much of the region is forecast to see sustained rent growth.









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