APAC retail property market expected to fully recover in 2022
Rental decline slowed to -0.2% in Q3 2021.
According to CBRE, tighter pandemic restrictions weighed on retailers’ sales ahead of the year-end shopping season and many retailers deferred expansion plans to 2022. Some retailers are using pop-up stores with lower upfront investment to meet short-term needs over the holiday season.
CBRE added, “As social-distancing measures and border restrictions ease, the retail recovery is expected to gain momentum. On the expectation of a full recovery in 2022, retail rental decline slowed to -0.2% q-o-q. Mainland China and Hong Kong SAR are expected to support rent stabilisation across the region.”
Here’s more from CBRE:
The decline in rents slowed to -0.2% q-o-q in Q3 2021 thanks to stable performance in mainland China and Hong Kong SAR, particularly in non-prime shopping malls in the former.
Despite rents in some markets such as Melbourne, Tokyo, Singapore, and Taipei remaining under pressure, most cities saw a more stable performance compared to previous quarters. With most landlords expecting the retail market to recover in 2022, they are willing to offer more incentives to attract new tenants rather than reduce rents.
The decline in retail capital values narrowed this quarter with many markets seeing stabilisation supported by more upbeat rental performance. While some markets including Tokyo, Taipei, and Melbourne continued to register a further decline in capital values, momentum slowed as values have already dropped to 2015 levels.
Read the full report here.