APPD Market Report Article

Beijing

December 1, 2021

-8.2%

RMB 791.1

Decline
Slowing

Furniture brands active; entertainment retailers resume expansion

  • Furniture brands expanded at high-end positioned malls, with FNJI and Tales among those committing to new locations in the quarter. Landlords showed great interest in introducing these retailers as furniture brands require larger spaces and widen existing tenant mixes.
  • Entertainment retailers were also active. KTV operators planned to open multiple stores, including K Show at Capitaland Mall Taiyanggong and V Show at Topwin. Meanwhile, murder mystery and escape room retailers expanded to shopping malls.

Xiyue Paradise Walk and Universal Studios Beijing open

  • Xiyue Paradise Walk opened in the quarter as the sixth Paradise Walk project in Beijing. The project opened fully committed, boasting more than 290 brands with 20 of them new to Fangshan District. Popular sportswear brands such as Nike, Adidas, and Champion further intend to attract young consumers in the area.
  • The highly anticipated Universal Studios Beijing opened in Tongzhou District, offering the popular US brand’s first theme park and resort in China. The mega-entertainment and retail complex is expected to draw large numbers of tourists to the city and especially the area, giving a boost to the overall retail market.

Top-performing malls turn a corner, recording positive growth

  • Urban rent drops slowed further following a steady recovery in overall leasing demand, while core rents remained stable with some top performers even recording positive growth in the quarter as the overall vacancy rate reached a very low level. Urban rents recorded -0.6% q-o-q growth. Meanwhile, core rents recorded 0.2% q-o-q growth.
  • The Suburban market witnessed continued demand recovery, with the overall vacancy level further sliding to 6.4%. The Suburban rent decline also slowed in the quarter, registering -1.4% q-o-q growth.

Outlook: Policy to impact children’s education tenants

  • Children’s education retailers are expected to face challenges from the recent policy restriction on curriculum-related tutoring. Many of these tenants remained closed in the quarter due to restrictions on operating hours, while children’s art and sports retailers are projected to hold a more conservative approach to expansion.
  • The west expansion of Taikoo Li is expected to open in November, with a focus on bringing more lifestyle and entertainment tenants to complement the existing sections. Meanwhile, the second Joy Breeze in Beijing is expected to open in Fengtai District by year-end.

Note: Beijing Retail refers to Beijing's Urban retail market.

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