1、FutureCities2024AsiaPacificRetailInnovationIndexASIAPACIFICREALESTATECBRERESEARCHNOVEMBER2024REPORT2CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexIntroductionMarketsizeConsumerprofileRetailergrowthstrategiesSpacesthattellastoryOverallscore&actionsfor
2、landlordsandretailersContents0102030405063CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexIntroduction4CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexIntroductionIntodayshighlycompetitiveAsiaPacificretailmarketplace,retailersmustcon
3、tinuallycreateinnovativeproducts,servicesandexperiencestodifferentiatethemselvesfromtheirpeers.Withbrick-and-mortarretailremaininganintegralpartofconsumersshoppingjourney,retailrealestatecontinuestoplayamajorroleinthecreationanddeliveryofinnovativebrandexperienc
4、e.Basedonitsmarket-leadingresearch,CBREhasidentifiedatotalof12attributesthatnurtureinnovationinretailrealestate.CBREhasusedtheseattributestocreatetheAsiaPacificRetailInnovationIndex,whichanalysestheinnovationperformanceofmajorcitiesinAsiaPacificandidentifies
5、theirstrengths,weaknessesandrelativeappealtoretailers.Thereportalsoprovidesrecommendationstolandlordsandtenantsonhowtosparkinnovationandcreativityintheirportfoliostoaddresstheretailindustrysevolvingneedsandexpectations.5CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaP
6、acificRetailInnovationIndexFourkeypillarsandattributesYoungerandmorescalableconsumermarketstendtobemoreopentonewretailproductsandstrategies.Vibrantretailmarketplacescanfacilitategreaterideaexchangeandbolsterinnovationandcollaborationamongretailers.Amorediverse
7、consumerprofilecanaccommodateagreatervariertyofproducts,servicesandexperiences.Availabilityofhigh-qualityretailspacemakesiteasiertoimplementnewconceptsandexperiences.AttributesAttributesAttributesAttributesPopulation%ofyoungpopulationConsumerspendingIntentiontoopennew
8、storesDiversityofleasingdemandAcceptanceofnewretailtradesDiversityofretailandentertainmentexperiencesAppealtointernationaltouristsPresenceonsocialmediaAvailabilityofnewsupplyandcurrentvacancyEaseoffindingqualityandcost-effectivespaceLandlordswillingnesstoado
9、ptassetenhancementinitiativesRetailergrowthstrategiesSpacesthattellastoryConsumerprofileMarketsize6CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexMarketsize7CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexKeyconsiderationsLeading
10、marketsPotentialmarketsThesizeofacitysconsumerbaseisakeyconsiderationforretailersseekingtomeasurethepotentialmarket.AsiaPacificishometomanylargemetropolitanareasthatofferopportunitiestoexpandatscale.hasthehighesturbanpopulationintheregionandrelativelyhigh
11、spendingpercapita.However,thecitysrapidlyageingpopulationposesamajorchallengetogrowth.isprojectedtoachievehighgrowthinitspopulationandconsumerspending,backedbypolicysupporttoattractforeigninvestmenttosetupGlobalCapabilityCentres(GCCs).anditssurroundingareasacc
12、ommodatealmosthalfofKoreaspopulationandhasrelativelyhighspendingpercapita.KoreasK-popcultureisinfluencingconsumersglobally.hastheyoungestpopulationofanymainlandChinesetierIcity.Thankstoitsgeographicallocationinthesouth,thecityisattractingspendingfromHongKong
13、SARresidents.isoneofthemostaffluentmetropolitanareasofmainlandChina.Althoughthecityspopulationisindecline,consumerspendingpowercontinuestogrow.SpendinginAustraliancitiescontinuestobenefitfromhighlevelsofimmigration.Brisbaneisthemostattractivemarketasitishom
14、etoayoungerpopulationandwillhosttheSummerOlympicsin2032.SpendingpercapitavariessubstantiallyacrossAsiaPacific.Whilethereexistseveraldevelopedmarketsforhighprice-pointproductsandservices,severallargemetropolitanareasarestillatadevelopingstage.Youngergenerations
15、aretypicallymorereceptivetonewbrandsandideas.WhilemanyeconomiesinAsiaPacificareseeingrapidageingatanationallevel,citiescontinuetobehometolargeyoungpopulations.MarketsizeCitypopulationTokyoBangaloreSeoulShenzhenShanghaiBrisbaneSpendingpercapitaProportionofyoungpop
16、ulation8CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexWhileAsiaPacificishometoseveralmegacitieswithlargeconsumerbases,manyfacechallengessuchascapacityissuesandageingpopulations.LeadingAsianmetropolisessuchasSingapore,HongKongSAR,Seoul,andToky
17、owillexperienceshrinkingpopulationsbutcontinuedgrowthinspendingpercapita.Australiancitiesanticipatefurtherpopulationgrowthandthereforeanincreaseinspendingpower.Amongemergingmarkets,citiesinIndiaandVietnamhavehighpotentialforgrowthintermsofbothpopulationandspe
18、ndingpower,althoughcurrentspendingpercapitaremainslow.Bangkokisalaggarddueitsolderpopulation.InMainlandChina,GuangzhouandShenzhenareexpectedtooutpaceBeijingandShanghaiintermsofgrowthintheirworkingpopulationsasyoungerworkersareluredbybetteremploymentprospects
19、intheGreaterBayArea.PopulationgrowthinmegacitiesfacesbottleneckbutspendingisstillincreasingFigure1:GrowthofWorkingPopulationvs.SpendingPerCapita(2023-2033CAGR)Sizeofbubble:workingpopulationtimesspendingpercapitaSource:OxfordEconomics,October2024Growthofspendingper
20、capita(2023-2033CAGR)Workingpopulationgrowth(2023-2033CAGR)highexpectedgrowthinspendingpercapitaandworkingpopulationlimitedfuturegrowthinspendingpercapitaandshrinkingworkingpopulationGreaterTokyoShanghaiGreaterOsakaSydneyBeijingGuangzhouDelhiShenzhenBangaloreMumbaiBangkokHo
21、ChiMinhCityHanoiHongKongSARSingaporeMelbourneBrisbaneGreaterTaipeiKualaLumpurAucklandGreaterSeoul-1%0%1%2%3%4%5%6%7%-2%-1%0%1%2%3%9CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexDifferentgenerationshavedifferentspendinghabitsBabyBoomersMillennialsGenXGenZG
22、enAlphaSecurityAccumulatedwealthoverseveraldecades.Preferphysicalshopping,qualityandgoodservice.StatusGraduallyassumingpositionsofleadershipinthebusinessandpoliticalworld.PersonalexpressionGravitatetowardspurchasesthathelpthemexpressthemselves.ThebestformeGravitatetow
23、ardsproductsthatenablethemtoshowcasetheirlifestyleonsocialmedia.UnknownDependsonGenX&Millennialparents.1946-196460+Peace1981-199630-44Mobilephones1965-198045-59Massmedia1997-201015-29Smartphones&socialmedia2011-202514orbelowA.I.BornBornwithSpendingAge10CBRERESEARCH2024CBRE,IN
24、C.FutureCitiesAsiaPacificRetailInnovationIndexTherearearound108millionpeopleaged29orbelow(i.e.GenZandGenAlpha)inmajorAsiaPacificcities.Thiscohortaccountsforover40%ofthepopulationinIndiaandVietnam.InmainlandChina,ShenzhenandGuangzhouhaveyoungerpopulationscompa
25、redtoothercitiesduetotheirrelativelyhigherbirthratesandabilitytoattractyounglocaltalent.Thelatestgenerationofyoungconsumersismoreacceptingofnewretailideasandexperiences.Whilesocialmediaremainsessentialtotheirdailylife,theirpreferenceshaveshiftedfromphoto-o
26、rientedappssuchasInstagramtowardsplatformsprovidingshortvideossuchasTikTok(theTikTokisation).WhileHongKongSARandcitiesinJapanhavetheoldestpopulationsduetolowbirthratesandlong-lifeexpectancy,theyarehometolargenumbersofGenXandbabyboomerswithtimeandwealth
27、tospend.Thesemarketswillthereforecontinuetoenticeretailerstointroduceinnovativeproductsandservicesthattargetthesilvereconomy.IndiaandVietnamaretheyoungesteconomiesinAsiaPacificFigure2:PopulationBreakdownbyGenerationCohort,2023Source:OxfordEconomics,October20240%10%
28、20%30%40%50%60%70%80%90%100%GenZGenXSilentGenAlphaMillennialsBabyBoomersDelhiBangaloreHanoiMumbaiHoChiMinhCityShenzhenBrisbaneGuangzhouKualaLumpurAucklandSydneyMelbourneBangkokSingaporeGreaterSeoulGreaterTaipeiGreaterTokyoGreaterOsakaHongKongSARBeijingShanghai11CBRERESEARCH2024CBRE,I
29、NC.FutureCitiesAsiaPacificRetailInnovationIndexConsumerprofile12CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexKeyconsiderationsLeadingmarketsPotentialmarketsStronganddiverseconsumerspendingondiscretionaryitemsandentertainmentactivitiesreflectsacity
30、svibrancy,stimulatinggrowthandtheoveralldynamicsoftheretailindustry.ranksasoneofthemostvisitedcitiesintheworld.Ithasarichculturallegacytogetherwithadiverseandbudget-friendlyretailandentertainmentlandscape.islookingtoboostinboundtourismbyexpandingvisa-freee
31、ntrypoliciesandimprovingtouristservices,withtheaimofachievingstronggrowthinforeigntouristarrivalsin2024.hasestablisheditselfasapremierentertainmenthubintheregion,playinghosttolarge-scaleconcertsandeventsthatdrawlargenumbersofhigh-spendingtourists.hashighgrow
32、thpotentialdespiteitsrelativelyuntappedinboundtourismmarket.Rapidurbanisationisstimulatinggrowthinsocialmediausageandbringingretailersclosertoconsumers.isregardedasspringboardforretailerexpansionintomainlandChinaandisalsoatravelhotspotinitsownrightduetoits
33、blendofAsianandWesternculture.isoneofthefastestgrowingeconomiesinAsiaPacific.However,morediverseandinnovativeretailofferingsareneededtomeetdemandfromitsgrowingmiddle-classpopulation.Tourismandretailarecloselyintertwined.Adynamicinboundtourismmarketstimulatesc
34、ulturalexchange,whilestrongexposuretooverseastouristshelpsretailersboostbrandawareness.Socialmediaenablesmoredirectandin-depthcustomerengagement,suchasco-creatingcontentwithusersandprovidinginsightintonewproducts.Sharingfunctionsalsohelpretailersreachpotentialnew
35、consumers.ConsumerprofileDiversityofRetailandEntertainmentSpendingBangkokMainlandChinaSingaporeIndiaHongKongSARVietnamAppealtoInternationalTouristsActivityonSocialMedia13CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexSpendingonretailandenvironmentdiv
36、ergesacrossmarketsFigure3:BreakdownofDiscretionarySpendingas%ofTotalSpendingonProductsandServicesSource:OxfordEconomics,October20240%5%10%15%20%25%30%35%40%45%DelhiBangaloreHanoiMumbaiHoChiMinhCityShenzhenBrisbaneGuangzhouKualaLumpurAucklandSydneyMelbourneBangkokSingaporeGreaterS
37、eoulGreaterTaipeiGreaterTokyoGreaterOsakaHongKongSARBeijingShanghaiCommunicationgoodsandservicesRecreationalandculturalgoodsandservicesRestaurantsandhotelsClothingandfootwearHouseholdfurnishings,householdequipmentandotherhousingexpenditureConsumersinHongKongSARandBangkok
38、havethehighestpropensitytospendonnon-essentialitemsandservices,withalmost40%oftheirtotalconsumerspendingallocatedtodiscretionaryitems.Thisispartiallyduetothelargenumberofinboundtouristsvisitingthesemarkets.IndiaandmainlandChinarankedthelowestintermsofdiscr
39、etionaryspending,withmostoftheirconsumerspendinggoingtonon-discretionaryitemssuchashousingandnecessities.CBREadvisesretailersandlandlordstoaligntheirproductofferingwiththeconsumptionpreferencesineachmarket.Forexample,clothing-relatedretailersmayprioritisemarketsl
40、ikeHongKongSAR,SeoulandTaipei,whileF&B-relatedmarketingcampaignsandeventsarelikelytohaveagreaterchanceofsuccessinBangkokandHoChiMinhCity.14CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexHongKongSARthemostvisitedFigure4:BreakdownofTourist
41、ArrivalsbyMarketofOriginin2023Visitornumbersandoveralltourismofferingcanprovideinsightsintoacityscapacityforretailinnovation.WhileHongKongSARregisteredthehighestnumberoftouristarrivalsinAsiaPacificin2023,thecitysretailmarketisdependentuponmainlandChinese.
42、CitiesinmainlandChinahavealowerscoregiventheconcentratedvisitorprofileandrelativelysmallinboundtourismarrivals.OtherlaggardsincludeAucklandandIndiancities.Bangkoktoppedtherankingsonthebackofitslargenumberoftouristarrivals;diversifiedsourcemarkets;andvarietyof
43、experiences.Tokyorankedsecondwithsimilaradvantages.Retailersandlandlordsshouldmonitortouristsconsumptionpreferences,whichhavebecomemoreexperience-orientedinrecentyears.ExamplesincludemoremainlandChinesetouristsexploringurbanareasofcitiesattheirownpace(knownascityw
44、alkinmainlandChina)insteadofshopping.Otherstrategiesincludeidentifyingtouristspreferencesonsocialmediaplatforms.Xiaohongshu,whichhasmorethan300millionactiveusers,hasbecomeakeyplatformforretailersseekingtoreachChinese-readingconsumersacrosstheregion.Note:Breakdownf
45、orHongKongSARvisitorarrivalsrefersovernightvisitorsonly.Source:CEIC,October2024Japan(25.1million)KoreaTaiwanRestoftheworld28%17%10%8%8%4%3%3%2%18%HongKongSAR(34.0million)Thailand(28.2million)MainlandChinaMainlandChinaKoreaIndiaRussiaVietnamSingaporeUSALaosMalaysiaRestoftheworl
46、dRestoftheworldJapanKoreaMacauSARSingaporeUSAThailandTaiwanPhilppines61%13%6%6%5%4%4%3%3%16%23%40%1%2%2%2%2%2%2%3%MainlandChinaHongKongSARUSAThailandPhilippinesAustraliaSingapore15CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexRetailactivityonsocialmediaisin
47、creasingFigure5:SocialMediaUsersinMajorAsiaPacificMarketsSource:Digital2024LocalCountryHeadlinesReport,Link1Source:EcommerceinSoutheastAsia2024,MomentumWorks,July2024.LinkNumberofsocialmediausers(inmillions)MainlandChinaIndiaIndonesiaJapanPhilippinesVietnamThailandKoreaMala
48、ysiaAustraliaTaiwanHongKongSARSingaporeNewZealand4621060NumberofsocialmediausersPenetrationRatio(RHS)0%20%40%60%80%100%0306090120150Socialmediaplatformshaveamplifiedconsumersabilitytoenjoymorememorableanduniqueexperiencesfromproductusageand/orvisitstoretailshopsforcont
49、entsharing-use.Theyarealsoenablingretailersandconsumersacrosstheglobetobecomemoreinterconnectedwhileacceleratingawarenessofnewretailbrandsandtrends.Somesocialmediaplatformshaveventuredintoe-commerce.WithaGrossMerchandiseValueofUS$16.3billion,TikTokShopwasthet
50、hirdlargeste-commerceplatforminSoutheastAsiain2023,behindonlyShopeeandLazada1.16CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexNewconsumertrendsareemergingPet-OwnershipSports&WellnessToysforYoungAdultsEvents&ConcertsArts&CulturePetownershipisonthe
51、riseasyoungergenerationssatisfytheiremotionalneedsbybecoming“petparents”Designertoysandcollectiblessuchasfigurinesandmodelsarebecomingmorepopularamongyoungadults.*ACGNisanabbreviationforAnimation,Comics,Games&NovelsConsumersareincreasinglywillingtospendonhealth,
52、wellbeingandself-care.Moreconsumersareadoptinga“youonlyliveonce”attitude,whichisboostingspendingonexperiences.Theriseoftheexperientialeconomyisstimulatingconsumerengagementinart,music,andculturalactivities.Pet-relatedretailersandserviceproviders,suchaspet-friendlyre
53、staurants,menus,groomers,andclinics,areexpandingMorepetfriendlyamenitiesareneeded,suchaspetstrollers,openspacesorturf,anddrinkingwaterstationsMoreretailerssellingcollectiblesandACGN*areexpandingintoshoppingcentresLandlordsarerecommendedtocollaboratewithretailerson
54、marketingactivityandpremierproductlaunchestoattractmoreconsumertrafficSportsretailersandboutiquefitnesscentresareingrowthmodeLandlordsaretappingintothetrendforoutdoorsportsandwellnessactivities,suchasbyinstallingrunningtracksinpublicareasPropertyownersarea
55、dvisedtoleveragemajorsportseventsforpromotionalcampaigns,suchaslivebroadcastsoftheOlympicsinshoppingcentresMorecitiesarecompetingtohostmega-eventstodrivevisitorarrivalsandspendingSomesmall-scaletheatreshaveexpandedintomajorshoppingcentresLandlordsarehosting
56、liveperformanceintheirpropertiesaspartofastrategytoboosttheirentertainmentofferingShoppingmallsareincorporatingmoreaestheticelementssuchasartinstallations,dcorandinteriordesignfeaturesTheincreaseinpublicspaceinshoppingcentresisdesignedtofacilitateculturalac
57、tivities,withatriumsandotheropenareasalsoservingasperformancevenues17CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexRetailergrowthstrategies18CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexKeyconsiderationsLeadingmarketsPotentia
58、lmarketsAsteadyflowofnewstoreopeningstypicallypromptsretailerstodelivermoreeye-catchingandinnovativestoredesignsormarketingcampaignstocaptureconsumersattention.remainshighlysoughtafterbyupscaleretailers.Overseasbrandscontinuetoseekspaceinkeyshoppingdistrictst
59、ocapturerobustinboundtouristspending.continuestoseesolidexpansionarydemandfromnew-to-marketretailers,supportedbyanampleshoppingcentrepipelineandrobusttouristarrivals.Rapidgrowthbydomesticbrandshasalsoaddedtothevibrancyofthecitysretaillandscape.ishometoestabli
60、shedretailhotspotssuchasMyeongdongandGangnamalongwithemergingareasincludingSeoungsu-dong,whichisgainingmoretractionamongyoungershoppersonthebackofthepresenceofpop-upstores.iswitnessinggrowingdemandfromretailtainment-basedretailersaswellasawiderangeofnewent
61、rantsintheF&Bsegment.iswitnessinganincreaseinnewshoppingcentredevelopmentaslandlordslooktoaddressthelackofqualitysupply,whichremainsakeybarriertoretailersexpansion,especiallybyupscalebrands.isattractingmoreinterestfromretailersonthebackofitsgrowingmiddlec
62、lassandimprovingavailabilityofqualityretailspace.Adiversepoolofretailersoperatingacrossarangeofcategoriesfacilitatesideaexchangeandencouragescollaborationinproductdevelopmentandbrandmarketing.Consumermarketsthatareopentoinnovativeretailtradesandstrategiesarea
63、bletoattractretailerstousethemastestbedsformarketandproducttesting.IndiaandVietnamcontinuetooffergrowthprospectsIntentiontoOpenNewStoresJapanBangkokKoreaSingaporeIndiaVietnamDiversityofLeasingDemandAcceptanceofNewRetailTrades0%20%40%60%80%100%Sep-23Dec-23Mar-24Jun-24Se
64、p-2476%76%82%80%AppetiteforMoreSpace:77%19CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexRetailershaveastrongdesiretoexpandinAsiaPacificSource:AsiaPacificLeasingSentimentIndex,CBREResearch,September2024.Figure6:NatureofRetailLeasingEnquiriesNewset
65、-upRenewalExpansionRenewalvsRelocationAnalysisSubleaseUpgradingLeaseRestructureConsolidationRelocationDownsizingMarketsentimentisbasedonthesimpleaverageofnetintentions(net%differencebetweenpositiveandnegativeanswers)ofsevensurveyedindicators.Source:AsiaPacificLeasingMarketS
66、entimentIndex,September2024Figure7:LeasingSentimentbyMajorMarkets-40%-20%0%20%40%60%80%MainlandChinaIndiaSoutheastAsiaJapanKoreaAustraliaHongKongSARSingaporeAsiaPacificSeptember2023September2024StrengthenedRetailleasingsentimenthasbeensolidoverthepast12monthsaccordingtoCBR
67、EsAsiaPacificLeasingSentimentSurvey,withover75%ofsurveyedbrokersreportingleasingenquiriesfromretailersseekingnewsetups,expansionandupgrading,indicatingappetiteformorespace.Thisispartiallyduetoretailersrebuildingstorenetworksafterreducingthemduringthepandemic.Stor
68、eopeningstrategiesincludecapitalisingonmarketweaknesstoexpand/relocatetocorelocations;committingtolongerleasesforpop-upstores;andfocusingonsmallerbutmoretargetedstorestohostspecificproductlines.Despitethepositiveoverallpicture,therearesomegeographicalnuances.Lea
69、singsentimentinGreaterChinahasweakenedduetosluggisheconomicperformancewhilethatinKoreahasfallenfromahighbase.Japanisseeingstrongersentimentonthebackofrecord-breakingtouristspending.20CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndex051015202
70、5JapanandIndiaarethemostpopularmarketsforretailerexpansionFigure8:MarketswithStrongestExpansionaryDemandfromTenMajorTradeCategoriesasofJune2024Note:Thestrengthofexpansionarydemandofeachtradecategoryismeasuredonafive-pointscalewithfivepointsrepresentingvery
71、strongexpansionarydemand.Source:AsiaPacificLeasingSentimentIndex,CBREResearch,June2024.Totalscoreofstrengthofexpansionarydemand(Fivepointsmaximumforeachtrade)F&B-causaldiningBeauty/CosmeticsF&B-upscaleFashion&ApparelGroceryEntertainmentLuxuryHomewareSportinggoods/AthleisureServi
72、ces(e.g.gyms,education)MainlandChinaIndiaSoutheastAsiaJapanKoreaAustraliaHongKongSARSingaporeAsiaPacificInadditiontothestrengthofleasingsentiment,CBREhasassessedthediversityofexpansionarydemandacrosstenmajorretailcategories.Thebroaderspectrumofdemand,themorecollaboratio
73、nbetweendifferentbrandsandtrades.Japanscoredthehighestindiversityofleasingdemand.ApartfromF&B,thismarketiswitnessingsoliddemandfromfashionandapparelretailers,especiallydomesticbrands.InIndia,activityisbeingdrivenbynewoverseasentrantsandup-and-cominglocalbrands,
74、withestablishedmainstreambrandslessaggressive.Manymarketsareseeingtheemergenceofnewretailsubcategoriesorbrands.Forexample,theentertainmentsegmentisbeingdrivenbyindoorplaygrounds,whiletraditionaloccupierslikecinemasarequiet.Inthesportssegment,demandfromsmallerspec
75、ialistbrandsandoutdoor-relatedretailersisoutpacingestablishedgroups.21CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexHowareretailersredefiningvalueforcustomersProductValueCreativeBrandValueEmotionalValueSpecialistValueESGValueRetailersareexpanding
76、theirproductlines,especiallylifestylerelatedgoods,tocoverdifferentpricepointsandexpandtheircustomerbaseUpstream:watches,jewellery,furnitureDownstream:beautyandskincare,cafesConsumersarevisitingastoretoengageinaspecificactivity,notonlytopurchaseaproductRetailersar
77、eutilisingpop-upexperiencestorestocreate“timelimit”pressuretoencourageconsumerstovisitLocalisedthemesareimplementedacrossdifferentmarketsPremierbrandsarefocusingonspecificproductsorspacesthatarenotalreadydominatedbyasingleretailerExamplesincludeCasetifyforph
78、oneaccessories;Lululemonforyoga/sportswear;andStanleyforwaterbottlesConsumersaredisplayingdemandformorespecialisedorprofessionally-madeproductsratherthanthosefromgeneralretailersThisisspurringtheriseofsmallerbutmorespecialisedbrandsRetaildestinationsareincreasin
79、glyagglomeratingspecifictradesMoreretailersareexploringopportunitiestoopencarbon-neutralretailstoresthatfactorcarbonusageintodesign,materialsanddisplayequipment,andsellproductswithrecycledmaterialsStandalonestorescanusesolarenergy,moreefficientHVACsystemsandLED
80、lightingcontrols22CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexSpacesthattellastory23CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexKeyconsiderationsLeadingmarketsPotentialmarketsAmplesupplyofqualityretailspacehelpsbothretai
81、lersexpansionandtheirabilitytobemorecreativebyhostingexperientialelementsinbrick-and-mortarstores.isseeingshoppingcentrelandlordsrespondtosluggishleasingsentimentandtheamplenewpipelinebyofferingattractiveleasingtermstoattracttenants,especiallytobrandsthatmay
82、providecreativeconsumerexperiences.continuestowitnesskeencompetitionbetweenmajorshoppingcentresintheCBD,wheresupplywillcontinuetogrowin2024-2026.Thisislikelytopromptlandlordstoinvestinplacemakingtodifferentiatetheirpropertiesfromthecompetition.iswitnessinganin
83、creaseinthecompletionandconstructionofnewretailspaceasredevelopmentprojectsinTokyoandOsakasmajorshoppingdistrictscontinue.continuestoseeretailersutilisepop-upstorestointroduceinnovativeretailexperiencesandbetterconnectwiththeirconsumers.landlordsareinvestingin
84、creatingamorediversifiedtenantmixandexperiencetoretainconsumersinterestamidgrowingcompetitionfromrivalmallsandacrosstheborderinShenzhen.IsseeingretailersupgradeintoCBDareasandlaunchnewconceptsastheycapitaliseontherentalcorrectionsincethepandemictoleasep
85、rimespace.Rentsandotherqualitiveparameterssuchasmarkettransparencyandthebalanceofpowerinnegotiationsarekeyconsiderationsforretailersconductingrealestateplanning.Shoppingcentresbecomelessattractiveandevenobsoleteiftheirtenantmixandinteriordesign/layoutarenotm
86、odernisedonaregularbasis.Thisisparticularlyimportantforageingassetsinmatureeconomies.SpacesthattellastoryAvailabilityofNewSupplyandCurrentVacancyMainlandChinaBangkokJapanKoreaHongKongSARAustraliaEaseofFindingQualityandCost-EffectiveSpaceLandlordsWillingnesstoAdopt
87、AssetEnhancementInitiatives24CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexTheAsiaPacificretailpipelineremainssignificantAround70%ofnewretailsupplycompletedinAsiaPacificoverthepastdecadehasbeeninthefourmainlandChinesetier1cities.Ascompetit
88、ionrapidlyintensifies,landlordsinmainlandChina,particularlyownersofprojectsinoversupplieddecentralisedretailareas,arebecomingmoreaccommodativetonewretailtradesandconcepts.Nichetenantssuchasindoorzoos,archeryclubsandhorse-ridingcentresareestablishingapresenceindec
89、entralisedshoppingmalls.Duetolimitedstock,landlordsinIndiaareconvertingopenareasoramenityspaceinshoppingcentrestoaccommodatemoretenants.TheshortageofprimespaceinVietnamispersistingasmostnewretailsupplyisconcentratedinnon-CBDareas.Inmatureeconomies,newretail
90、spaceincorelocationsismainlyinredevelopmentprojects.Togetherwithelevatedconstructioncosts,thiswillensurenewsupplyremainslimited.Source:CBREResearch,November2024.Figure9:AsiaPacificRetailDevelopmentPipelinein2025-2026ShanghaiShenzhenBeijingGuangzhouBangkokVietnam(Hanoi&HCMC
91、)IndiaTaipeiTokyoAustraliaSeoulNewZealandHongKongSAR29%21%11%10%7%6%4%3%3%2%1%1%2%25CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndex0%3%6%9%12%DeclineinprimevacancyfavourlandlordsVacancyinmostAsiaPacificretailmarketshasdeclinedsince2023asretailersacce
92、leratetherebuildingoftheirstorenetworksandcapitaliseonfavourableleasingterms.However,astrongflight-to-primecoremindsetamongretailershasledtodivergentdemandforprimeandsecondaryretailspace.Vacancyinprimeareashasexperiencedasharpercontractionandretailersarefindi
93、ngitincreasinglychallengingtoidentifysuitableexpansionopportunities.Incontrast,demandforsecondarylocationsremainslimitedandmarketslikeShanghaihasseencitywidevacancyedgedupduetotheweakerperformanceoutsideprimeareas.CBREbelievestheslowerrecoveryinrequirementsfor
94、spaceinsuchareasmayofferattractiveandaffordableoptionsforsmallerretailerstotestnewconcepts.Tofacilitatedemand,landlordsofsecondaryretailspacearerecommendedtoadoptamoreproactiveapproachinluringtenantstotheirpropertiesandareas,suchasbyorganisingpop-upmarkets
95、andcollaboratingwithartistsforeventsandactivities.Source:CBREResearch,November2024.Figure10:VacancyRatesinSelectedPrimeShoppingDistrictsQ32023Q32024Beijing-PrimeSydneyCBDSingapore-OrchardMelbourneCBDHCMC-CBDTokyo(Ginza)Shanghai-PrimeHanoi-CBDHongKongSAR-PrimeStreets26CBRERESE
96、ARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndex-40%-20%0%20%40%60%-2004006008001,000PrimeretailestatehasbecomemoreaffordablesincethepandemicFigure11:PrimeRetailRentsofmajorAsiaPacificmarketsHalfoftheAsiaPacificretailmarketstrackedbyCBREhaveregister
97、edadeclineinprimerentssincethepandemic;atrendthathasspurredupgradingandexpansiondemand,includingfromretailersseekingmoreexperiential-drivenstores.ThestrongestdeclineinprimeretailrentshasbeenrecordedinAustraliasCBDs,particularSydneyandMelbourne.Incontrast,thedec
98、lineinprimerentsinHongKongSARhasbeenrelativelymild,asthecorrectionbeganin2014onthebackofchangingpreferencesamongmainlandChinesetourists.Nevertheless,rentsinthismarketcurrentlystandatjustone-thirdoftheirpeak.Withthesemarketshavingbecomemoreaffordable,morere
99、tailerscanexpandtheirfootprintandtestnewconcepts,whileothersreturntothemarketafteraperiodofabsence.DespiteretailrentsinBangkokremainingstableoverthepastfewyears,thecitysrelativelycheaperrentsandamplesupplyofqualityretailspaceareprovidingroomforsmallerret
100、ailerstoexpand.Note:%changeinrentsisbasedonlocalcurrencySource:CBREResearch,November2024PrimeRentinUSDpersq.ft.perannum%changeinrentsfromend-2019HongKongSARTaipeiTokyo(Ginza)HanoiMumbaiDelhiShenzhenPerthHoChiMinhCityAucklandSydneyMelbourneBangkokGuangzhouBrisbaneShanghaiBei
101、jingSingaporePrimerentsasofQ32024%changefromend2019(RHS)Rentshavecorrected27CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexSeveralelementsareneededforspacetotellastoryOutdoorareasareneededtoprovidefreshairtoshoppers.Suchfeaturesalsoallowsh
102、opsandrestaurantstooperateinamorerelaxedenvironment.Withpet-ownershipontherise,mallsshouldbedesignedtobeanimal-friendly.Examplesincludepetplayareasandtoilets.Shoppingcentrelandlordsarelookingtocapturesportsrelatedspending,spanningfromapparel,equipment,sportsclubs
103、andnewsports-themedentertainmentandexperientialretailers.Experientialretailersthatincorporateimmersive,interactiveandshareableexperiencesareincreasinglysoughtafter.TheseincludeplayroomsforyoungfamiliesandVRgamesforadults.RetailpropertyownersmustassesstheirF&Bofferi
104、ngonanongoingbasisandconsistentlyintroducenewbrandsandconcepts.Moreshoppingmallsareincorporatingartistic,designandculturalelementstodifferentiatetheirofferingtoconsumersaswellasprovidingelementsforsocialmediacontent.AirFamily/PetsFitnessAmazeFood&BeverageAestheticsK
105、11ECOAST,Shenzhen(open2025)28CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexSeveraldifferentiatedretailneighbourhoodsexistinAsiaPacificSeoulTokyoTaipeiSydneyMelbourneBeijingShanghaiHongKongSingaporeRevitalisedretailparksShougangParkSeongsu-dongShimokitazawaC
106、hifengStreetPaddingtonArmadaleAnfuRoadSheungWantoSaiYingPunNewBahruApartfromtraditionalhighstreetsandshoppingcentres,moreretailersareexploringalternativeretailassetsanddestinationsinsearchofnewclienteleandambiance.Revitalisedbuildingsandneighbourhoodsfeaturingartis
107、ticandculturalelementsareincreasinglypopular,withSeongsu-donginSeoulanespeciallypopularexample.Previouslyanindustrialareawithwarehouses,theneighbourhoodhastransformedintoanepicentreforretailpop-upstoresaswellasahubforconceptstoresforindependentretailbrands.29C
108、BRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexExamplesofassetenhancementinitiativesHongkongLandandits10luxuryretailtenantsintendtoinvestatotalofUS$1billiontoexpandandupgradetheLANDMARKretailportfoliofromlate2024.Theschemewillresultinthe
109、creationoftenworld-class,multi-storey“Maison”destinations.Thecompletionofthree-yearrenovationin2019markedthepropertystransformationfromanITmarketplacetoamodernshoppingcentre.Whileitretainsmanytechelements,CapitaLandhasintroducedacomprehensivewellnessofferingtothe
110、assetincludinganurbanfarmandaclimbingwallaswellasco-workingspaceandco-livingresidencestomakeitatrulyintegrateddevelopment.FormerlyknownasHappyValleyShoppingMall,themallinTianhe,Guangzhouunderwentanextensiveredesignafteracquisition.Communalareashavebeenexpand
111、edandnewfeaturesinstalledincludingafull-servicechildrensplayground;aGen-Zsocialhub;andafoodstreetwithGuangdongdishes.OneofthebiggestshoppingcentresintheSouthernHemisphere,Chadstonesawthecommencementofrefurbishmentandexpansionworkin2022.Initiativesincludethecre
112、ationofnewdiningandentertainmentspace;expansionofcarparks;andanine-levelofficedevelopment.Theprojectalsoaddressedsustainabilityconcerns.TheLANDMARK,HongKongSARFunan,SingaporeLinkPlazaTianhe,GuangzhouChadstone,MelbourneInadditiontothescaleofthedevelopmentpipeline,CBRE
113、assesseslandlordswillingnesstocarryoutAssetEnhancementInitiatives(AEI).Suchschemesareparticularlyimportantinmatureeconomieswhereagedfirst-generationshoppingcentrescanbecomeobsoletewithoutregularenhancementwork.WhileanAEItypicallyincludesthemodernisationofashopping
114、centresdesignandhardware,thesuccessofanysuchinitiativedependsonre-establishingthepropertysmarketpositioningandimageviaperformingathoroughreviewofdesignconcept;mallcirculation;tenantmix;andamenities.DuringanAEI,landlordsmustworkwithtenantstominimisedisruptionto
115、theirbusiness.Propertyownerscanalsosmoothentheprocessbyinvitingtenantstoparticipatefromtheplanningstagetoalignwiththeirgrowthstrategyandbusinessneeds.30CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexOverallscore&actionsforlandlordsandretaile
116、rs31CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexSummary:LeadersandhighpotentialsWhilerealestateisalwaysaboutlocation,innovationiskeytosuccess.MarketsizeRetailergrowthstrategiesConsumerprofileSpacesthattellastoryYoungerandmorescalableconsumerm
117、arketstendtobemoreopentonewretailproductsandstrategies.TokyoSeoulShanghaiBangkokSingaporeHongKongSARKoreaJapanSingaporeMainlandChinaJapanKoreaTokyoSeoulBangkokBangaloreShenzhenBrisbaneMainlandChinaIndiaVietnamBangkokIndiaVietnamBangkokHongKongSARAustraliaMainlandChinaIndiaVietnam
118、Amorediverseconsumerprofilecanaccommodateagreatervarietyofproducts,servicesandexperiences.Vibrantretailmarketplacescanfacilitategreaterideaexchangeandbolsterinnovationandcollaborationamongretailers.Availabilityofhigh-qualityretailspacemakesiteasiertoimplementnew
119、conceptsandexperiences.KeyattributesLeadingmarketsPotentialMarketsOverallSydneyBrisbaneMelbourneAucklandBeijingShanghaiGuangzhouShenzhenHongKongSARTaipeiTokyoOsakaSingaporeSeoulDelhiMumbaiBangaloreBangkokHoChiMinhCity32CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovation
120、IndexStrongerpotentialformoreinnovativeretailexperienceCurrentlyleadinginretailinnovationRankingretailinnovationFigure12:CBREAsiaPacificRetailInnovationIndexAfterassessingtheperformanceofeachmarketaccordingtothefourkeypillars(marketsize,consumerprofile,retailergrowth
121、strategiesandspacesthattellastory)andclassifyingfactorsintothosethatindicatecurrentstrengthsinretailinnovationandthosepointingtopotential,CBREhascategorisedtheregionsmajorretailmarketsintothreemaingroups.Mostcitiesintheregionsemergingeconomiesofferstrongpot
122、entialformoreinnovativeretailexperiences.Retailsalesinthesemarketsarebeingdrivenbysolidpopulationgrowthandrapideconomicdevelopment.Thesecitiescanbefurtherdividedintotwogroupsaccordingtotheiravailabilityofqualityretailspace.ThegrowthpotentialofcitiesinIndiaa
123、ndVietnamcontinuestobecappedbythelackofprimequalityretailspace,especiallyincorelocations,whiletierIcitiesinmainlandChinacontinuetosufferfromsluggishconsumersentiment.Theregionsmatureeconomiescanbedividedintotwomajorgroups.Japan,KoreaandThailandleadretailin
124、novationwithintheregiononthebackoftheirvibrantdomesticretailecosystems;diversetourismsourcemarkets;andculturalandentertainmentoffering.TheremainingcitiessuchasHongKongSAR,SingaporeandSydneyserveasstrategicmarketsforretailersoperationswithintheregion.Whilehighc
125、onsumptioncontinuestoattractnewretailinvestmenttothesemarkets,growthpotentialislimitedbytheirdemographicstructure,particularlytheirageingpopulations.Source:CBREResearch,November202433CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexShoppingcentreshav
126、eevolvedintoplaceswherepeoplecometointeractratherthanpurepoints-of-sale.Landlordsarerecommendedtocreateretailspacesthatresonatewithconsumersandcreateasenseofemotionalattachmentbyintroducingmorediverseleisureelements.Landlordsareadvisedtoproactivelysourcenewb
127、randsabletoaccommodateelementsofsurpriseintotheiroffering.Pop-upconceptsorshortleasesshouldbeutilisedtoenableamoreregularrefreshingoftheirproducts,servicesandexperiences.Inadditiontointegratingleisureelementssuchasarts,fitness,wellnessandnaturalspaces,landlords
128、shouldinvestinsupportingamenitiesandhardware/softwaretoprovideholisticretailecosystems.ActionsforlandlordsCreateSpacethattellsaStoryIdentifyRetailerswithNewConceptsEmbracePlacemakingandProvideSupportingFacilities33CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetail
129、InnovationIndex01020334CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndexInaneraofexperience-drivenretailing,thestoreenvironmentiskeytoretainingandenhancingcustomerengagement.Retailersshouldprioritisethecreationofstoreswithdesignfeaturesandofferi
130、ngsthatcangeneratememorableexperiencesfortheirconsumers.Asthephysicalretailstorecontinuestoevolve,retailersareadvisedtoavoidoperatingidenticalstoreswithstandardproducts.Instead,theyshoulddirecttheirresourcesintodevelopingauniqueandlocalisedexperienceforeachindi
131、vidualstore.Althoughrentalcostandsalesproductivitywillremainamongthemostimportantcriteriaforsiteselection,retailersshouldtargetspaceinshoppingcentresorneighbourhoodsprovidinganambienceandtenantmixalignedwiththeirimageandaspiration.ActionsforRetailersCreateaRet
132、ailEnvironmentthatSellsPositionEachStoreasaUniqueBrandDestinationIdentifyRetailSpacethatMatchesTheirImageandAspiration34CBRERESEARCH2024CBRE,INC.FutureCitiesAsiaPacificRetailInnovationIndex010203ContactsRegionalResearchAdaChoi,CFAHeadofResearch,AsiaPJonathanHillsSenior
134、dotalandevidencebasedviewsofthecommercialrealestatemarket.AlthoughCBREbelievesitsviewsreflectmarketconditionsonthedateofthispresentation,theyaresubjecttosignificantuncertaintiesandcontingencies,manyofwhicharebeyondCBREscontrol.Inaddition,manyofCBREsviewsareo
135、pinionand/orprojectionsbasedonCBREssubjectiveanalysesofcurrentmarketcircumstances.Otherfirmsmayhavedifferentopinions,projectionsandanalyses,andactualmarketconditionsinthefuturemaycauseCBREscurrentviewstolaterbeincorrect.CBREhasnoobligationtoupdateitsviewshere
136、inifitsopinions,projections,analysesormarketcircumstanceslaterchange.NothinginthisreportshouldbeconstruedasanindicatorofthefutureperformanceofCBREssecuritiesoroftheperformanceofanyothercompanyssecurities.YoushouldnotpurchaseorsellsecuritiesofCBREoranyother
137、companybasedontheviewsherein.CBREdisclaimsallliabilityforsecuritiespurchasedorsoldbasedoninformationherein,andbyviewingthisreport,youwaiveallclaimsagainstCBREaswellasagainstCBREsaffiliates,officers,directors,employees,agents,advisersandrepresentativesarisingoutoftheaccuracy,completeness,adequacyoryouruseoftheinformationherein.