The limited supply of quality retail space coupled with robust demand pushed up high street rents in prime Asia Pacific markets in Q3 2013, revealed Jones Lang LaSalle’s maiden quarterly Retail Index.
The index, which monitors the rental performance of prime retail space across Asia Pacific’s key markets, underscores a significant difference between the region’s top performer, Hong Kong, and the other markets being tracked.
Notably, rents in Russell Street, Hong Kong stand at US$28,839 (S$36,034) psm per year, or four times higher than Tokyo at US$7,340 (S$9,171) psm per year.
This was followed by Shanghai’s West Nanjing Road and Singapore’s Orchard Road, with rents at US$5,366 (S$6,705) and US$4,713 (S$5,889) psm per year respectively.
“Over the past three years, retail sales in Hong Kong have grown by an average of around 15 percent per year which, when compared to the equivalent in European and US markets, has presented retailers with a promising growth opportunity and an ideal entry point for expansion into Asia,” noted Tom Gaffney, Head of Retail for Jones Lang LaSalle in Hong Kong.
He attributed the increase primarily to strong demand from retailers looking to expand or establish their footprint in the city as well as the limited supply.
Moving forward, Anuj Puri, Jones Lang LaSalle’s Head of Retail Asia Pacific, stated: “As the economy in Asia Pacific continues to improve, retail is once again emerging as a preferred asset class for investors who see consumption as being closely aligned to the region’s growth.”
“Retailers looking to geographically expand their reach within Asia next year should look at a two pronged approach: vertical penetration into existing markets such as China, India and Hong Kong; and a flanking strategy for countries such as Philippines, Thailand, Sri Lanka and Indonesia.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
Related Stories:
Penang market to moderate in 2014
London market to remain buoyant: report
UK tax to target foreign buyers