- Shopping Malls in China
- The Issue of Over Supply
- Western funds banking on housing China's Seniors
- 6,000 movie screen, 62 department stores and 68 karaoke centers
- China's Growth 7.4% in 2014 - latest update
- Is Bigger Really Better? - Beijing's 'suburban' Office District
- Who Says The Chinese Are Not Buying?
- Greenland raises $700 mln thru bond offering
NEW WEALTH of CHINA
Quote by Ken Kwan, author of Crazy Rich Asians
>> CHINA's SERIOUS YOUNG RICH
China Retail - Over supply?
"The mainland is by far the most active development market in shopping, accounting for half of the 32 million square metres of shopping centres under construction around the world"
"Second- and third-tier cities are leading the charge. Tianjin and Shenyang are adding two million square metres of shopping floor space, more than 100 shopping centres totalling 100,000 square metres are coming up in Chengdu while 574,000 square metres of new space has recently opened in Wuhan.
The number of shopping malls will rise to 4,000 by 2015 from 3,000 last year, according to the China Chain Store and Franchise Association." ...
"Developing a shopping mall typically involves a lag time of five to six years, which makes it difficult for the market to absorb this kind of rapid growth."
The expansion is taking place at a time when the economy is showing signs of losing steam and consumer demand cooling. Gross domestic product growth slowed to 7.5 per cent year on year in the second quarter, among the lowest in recent years.
"We believe the current [department store ecosystem] downturn could last another two to three years … with or without discounting, brand operators are facing declining profitability," Leung wrote in a report.
Listed brand operators such as Belle International and Daphne International have been hit the hardest, with their shares plunging nearly 35 per cent and 51 per cent respectively this year. Leung maintained "sell" ratings on both companies.
But Adrian Cheng, founder and chairman of New World China Land and K11, is not worried. "The overall impact of mainland China's slowing luxury goods demand won't be that significant for shopping malls like K11," Cheng said.
"It's only that they are more sensitive to the price point due to sentiment reasons."
By 2018, the company expects a total footfall of 350 million and total retail sales turnover of 20 billion yuan. With Hong Kong giants New World China Land and K11 jumping into the fray, the competition rises for mainland commercial developers.
Hang Lung Properties has five commercial projects in the pipeline, with investment of about HK$40 billion in second-tier cities such as Tianjin and Wuxi. Wharf Holdings is working on five projects with a gross floor area of 2.1 million square metres that are expected to be completed between 2013 and 2016.
Developers make space for China mall wars
-- 2013 July 26 SOUTH CHINA MORNING POST