Prime locations take priority as APAC retailers rein in new store openings

Demand for prime retail space remained strong across the region in H1 2026.

Retail leasing sentiment across Asia Pacific remained resilient in the first half of 2026, with retailers continuing to seek prime locations despite a more cautious approach to expansion, according to CBRE.

The property consultancy said retailers are increasingly focused on relocating or upgrading existing stores rather than opening multiple new outlets. Prime locations offer greater visibility and opportunities to drive sales across both physical stores and online channels, CBRE said.

The Middle East conflict has had only a mild impact on retailers' real estate planning, with most retail groups continuing to assess leasing plans. Demand for prime retail space remained strong across the region in H1 2026.

Tokyo's Ginza is expected to see further rental growth, with retailers' strong preference for the district for brand exposure supporting demand despite rents already being at historical highs, CBRE said. Limited availability in Ginza is also pushing retailers towards Omotesando, Harajuku and Shibuya.

Hong Kong SAR presents a more mixed outlook. Despite strong retail sales growth in the first half, CBRE expects a milder rental recovery in the second half, as much of the sales growth is being generated online and brick-and-mortar retailers remain cautious because of high operating costs.

In Taipei, rental growth is expected to remain limited and concentrated in tourist-oriented areas. CBRE said strong recent economic performance has not translated into comparable retail sales growth, with local consumers preferring to spend overseas.

Australia's regional retail centres are seeing continued rental support from population growth and limited new supply, although performance varies by market. CBRE raised its rental expectations for Brisbane on the back of a brighter economic outlook, while rising unemployment in Perth and Melbourne is weighing on rental growth.

In India, core retail markets in Mumbai and Delhi are recording rents at historical highs, while Hanoi and Ho Chi Minh City CBD rents in Vietnam are also at elevated levels. Limited availability continues to push rents higher, although CBRE expects the pace of growth to moderate. Further rental gains will depend on the addition of new high-quality supply.