ASIA - China is the top market in Asia Pacific and the fourth most popular destination globally, with 27% of retailers looking to expand there, according to a new international retail report by CBRE.
The next highest ranked Asia Pacific markets were Hong Kong in sixth position (24%), Japan in seventh (22%) and Singapore in ninth (21%). Dominating the top destinations this year were European markets.
The report findings come even though China and Hong Kong have been experiencing a slowdown in retail expansion amid weaker consumption growth. According to CBRE, retailers still consider these markets as their most important ones, and are responding to the slowdown by adjusting their portfolio strategy.
In Japan, solid domestic consumption and strong spending by inbound tourists have helped fuel retailer interest, which increased significantly in this year’s survey, with 22% of retailers surveyed indicating they plan to expand in this market in 2016, compared to 16% in 2015. A weaker yen is also helping to support the entry and expansion of foreign retailers, in particular those from the United States and Europe.
Meanwhile retail expansion in Southeast Asia is set to increase this year, with retailer interest in Malaysia (10.5%), Indonesia (9.2%), Thailand (8.5%), Vietnam (8.5%) and the Philippines (7.8%) more than double that of 2015 when all markets registered between 1-3%.
Despite all the strong positive indicators though, retailers generally remain cautiously optimistic towards the retail environment in 2016. As with 2015, when asked to identify the risk factors likely to affect them in the coming year, real estate cost escalation (56%) and unclear economic prospects (42%) were their top concerns.