Concrete Analysis | China’s shopping malls are becoming polarised as customers seek out quality, says JLL
- Roughly the top third of malls are seeing healthy growth in sales and rentals, while shoppers are walking away from the bottom third – poorly designed, uninspiring precincts, says JLL
China’s retail market is one of the biggest investment opportunities of this century, but nobody said it would be plain sailing. In 2019, as growth shifts down a gear it is crucial for investors to focus on what the market needs.
With retail sales in China hitting 38 trillion yuan (US$5.66 trillion) last year, in 2019 it is forecast to become the world’s largest retail market. China’s annual retail sales growth of 9 per cent looks incredibly strong.
However, after accounting for inflation and stripping away fast-growing segments like online retail and rural retail, we find that bricks-and-mortar sales in China’s cities are growing at 2.8 per cent in real terms – still very respectable by global ,but well below the oft-cited headline figure.
While physical retail sales are seeing slower growth, construction of retail space continues apace. JLL
statistics on high-quality shopping centres in China’s top 30 retail cities show that some 161 centres
were completed during 2018, bringing the total stock to 1,330. JLL forecast data shows that growth is set to continue, with most cities projecting an increase in shopping centre stock of 20 per cent to 50 per cent in the coming three years.