The New Century Global Center in Chengdu. (Flickr/David Chao)
China’s mall construction boom continues unabated as Chinese cities now house over half of the world’s new shopping center construction space, according to a new report by real estate consulting firm CBRE.
The firm’s newly released study, entitled “Shopping Centre Development – The Most Active Cities Globally” looked at 180 of the world’s biggest cities to see which ones were seeing the largest growth in construction of shopping centers 20,000 square meters or larger over 2013. Unsurprisingly, the firm found that China was the top market for development for the year, retaining its position from 2012.
Nine of the top 10 global cities on the list are from China, with Chengdu, Tianjin, and Shanghai in first, second, and third place, respectively.
Chengdu dominated the list by a wide margin. According to the report, the city saw the construction of more than 1 million square meters completed in seven different shopping centers. With the construction of the world’s largest building—which includes a massive shopping mall—and a new Lane Crawford location, Chengdu has had a busy retail year. The southwestern city is also becoming a top spot for luxury real estate.
China’s luxury malls have been struggling with high vacancy rates in lower-tier cities, but that doesn’t seem to have deterred developers. The report states that Chengdu has fared better in this regard, since prime locations haven’t see this problem with occupancy rates that have remained “stable.” However, suburban areas are still having trouble filling the spaces, causing landlords to lower rents and introduce additional features to the centers such as parks and playgrounds. It appears that developers are hoping that growing inland middle-class populations will benefit future growth and eventually fill malls, but it remains to be seen if they will be successful now that a growing number of luxury shoppers are buying goods overseas to avoid tariffs.
For now, the rush of new retail spaces is likely to continue: a survey by CBRE from earlier this year found that China remains a prime target for retail expansion in 2014.