Hong Kong may have the highest retail rents in the world for high-foot-traffic “high-street” locations, but placing a store in a mall in Beijing will cost a brand more than in any other Asian city. That was the finding of real estate firm CBRE in its first-quarter retail rent update for 2014, which found that Beijing’s shopping center retail rents are not only the most expensive, but also at the highest growth rate they’ve seen in years.
Shopping center retail rents are dominated by mainland Chinese cities: the top four Asian cities by retail rent price are Beijing, Shanghai, Guangzhou, and Shenzhen, respectively. Beijing’s retail rent stands at the top spot with an average price of US$663 per square foot per year.
Meanwhile, Shanghai’s shopping centers are far less expensive with rent of $518 per square foot per year. When it comes to central urban retail space, Hong Kong—which was listed as the location for the world’s most expensive high-street retail rent last year—retained its top position in the first quarter with a rent of US$4,331 per square foot per year.
Mainland retail rent amounts are growing much faster than those of Hong Kong, however. Beijing saw 3.7 percent quarter-on-quarter growth—the strongest rate recorded since the third quarter of 2011. This rate was much higher than that of Shanghai, which stood at 1.6 percent this quarter after growing 3.4 percent in the fourth quarter of 2013.
In contrast, Hong Kong only saw 0.1 percent quarter-on-quarter growth, which marked the lowest recorded rate since the fourth quarter of 2008. The decline may be due in part to the recent decrease in mainland tourists to Hong Kong after anti-mainland protests.
When it comes to new shopping center construction, the four largest upcoming mall openings are all located in mainland China. The Beijing Mall in Beijing’s Wangfujing district is the largest at 839,584 square feet, and is slated to open in the third quarter this year. Meanwhile, the 236,806-square-foot SOHO Fuxing Plaza will be going up in Shanghai’s modern Xintiandi area during the same period, while Guangzhou and Shenzhen will see the next-largest locations on the list.
While first-tier cities top the list for now, second-tier cities are rapidly building new malls. According to an earlier CBRE assessment, Chengdu is the top city in the world for new mall construction as it rises as a top retail hotspot in China.