• Demand in major APAC markets remains resilient, with visitor spending still a key driver of retail activity in many areas.

• Fashion brands, lifestyle, and affordable F&B concepts drive leasing activity, with international retailers maintaining strong interest in prime retail areas frequented by tourists.

• Prime shopping centre rents increased for the sixth consecutive quarter, with more markets recording growth, underscoring the sector’s adaptability to changing economic conditions.

The retail landscape in Asia Pacific during Q3 2024 showcased resilience amidst economic challenges. Tourism continued to be a key driver of retail spending, partially offsetting cautious domestic consumer behavior in markets experiencing slower economic growth. This trend was especially pronounced in tourist hotspots, where surging foreign arrivals reinvigorated key prime retail corridors.

Leasing activity maintained its momentum, particularly in dominant retail spaces. The healthy shopper footfall and tourism consumption continued to encourage strategic business expansions and often drawing new-to-market brands. Lifestyle and fashion retailers showed continued interest, while affordable F&B concepts expanded with a focus on refined offerings.

New supply continued to enter the market, albeit in pockets across the region. Despite this, vacancy rates held relatively stable, further testament to the sector’s underlying strength with healthy pre-leasing for many of the new completions.

Outlook
Looking ahead, the retail sector in Asia Pacific is poised for continued growth, albeit with some potential challenges. A sustained tourism recovery is expected to support brand expansion across the region, complementing domestic spending growth. Supply is expected to remain strong through the end of 2025, which may put upward pressure on vacancy rates. However, retailers’ focus on experiential offerings is anticipated to drive demand, particularly in prime locations.

As the region’s landscape evolves, adaptable retail spaces offering compelling experiences will be key to sustaining growth and consumer engagement. While a moderate rental uptrend is set to extend across much of the region, the balance between prime and secondary locations may see further divergence in performance.