Top 3 cross-border destinations retailers eye for expansion
Hong Kong and Singapore are tied for second place.
Most retailers prefer Tier 1 cities in Mainland China as the destination for their cross-border expansion in Asia Pacific, CBRE reported.
This is followed by Hong Kong and Singapore, which tied for second place, according to its 2023 Asia Pacific Retail Flash Survey.
“China and Hong Kong are forecasted to enjoy the strongest sales rebound after lifting pandemic-related measures. Retailers are positive yet believe the rebound is in sight but will happen gradually over a longer period,” Lawrence Wan, Senior Director, Head of Advisory & Transaction Services – Retail, CBRE Hong Kong, said.
“The return of Mainland China tourists to Hong Kong will give a strong boost to the sector. This is expected to drive leasing demand and rental growth, especially for tourist-oriented retailers.”
The report found that retailers in the region have an increasingly optimistic outlook with 72% of the retailers expecting their sales to rise from 2022 and 71% intending to open new stores despite rising costs.
It also reported that nearly half of retailers surveyed expect physical store footfall to return to pre-pandemic levels.
CBRE noted that in particular, retailers prefer quality retail spaces in shopping malls and along prime high streets. They also have higher interests in secondary high streets (37% in 2023 vs 23% in 2021) due to their lower rents as compared to prime locations.
“Retailers should also work with landlords for flexible leasing arrangements or fit-out incentives to manage costs,” he said.