Already home to more than half of the world’s population, and comprising approximately one-third of consumer expenditures, the Asia-Pacific region is already a global powerhouse. With its projections for continued population and economic growth in the future, the region is putting itself at the forefront of the global retail industry. Here, RLI takes a look at some of the key markets and projects in the region.
APAC ’s already large population will grow by 400 million people by the end of 2030, and over the next decade, disposable income is expected in increase by roughly US$12 trillion, accounting for nearly two-fifths of the global increase during that period, according to ICSC’s Industry Insight ‘Asia-Pacific’s Retail Renaissance: Success Through Omni-Channel Experiences.” These factors will put the APAC region on pace to make-up about half of total consumer expenditures by 2050.
In terms of individual markets, this year will most likely see China become the world’s top retail market, displacing the US, a feat that few would ever have thought possible even just a few years ago. According to eMarketer’s recent worldwide retail and ecommerce forecast, China’s retail sales this year will surpass that of the US by more than $100bn. China’s total retail sales grow by 7.5 per cent to reach $5.636tn, whilst US retail sales will grow 3.3 per cent to reach $5.529tn.
Key Markets in the Region
Australia, officially the Commonwealth of Australia, is a country comprising the mainland of the Australian continent, the island of Tasmania and numerous smaller islands. It is the world’s sixth –largest country by total area. Australia has the world’s 13th-largest economy and ninth-highest per capita income (IMF). Australia’s capital is Canberra, and its largest urban area is Sydney.
The People’s Republic of China (commonly known as China or the PRC) is located in East Asia. A decade of strong economic growth, rising household incomes and rapid urbanisation has fuelled rapid growth in China’s retail sector. China is now an essential part of the business strategies of many global retailers and for many is a must-win market. According to a study from McKinsey & Company, there will likely be 350 million more new urban residents and upwards of 200 cities with a population of over one million by 2025, that is approximately three times that of the US.
Indian consumers’ preferences have been constantly evolving because of growth in per capita income, rapid urbanisation and a burgeoning and well-travelled middle class. The Indian government has taken several steps to boost the growth of the retail sector with 100 per cent foreign direct investment (FDI) in single brand retail and allowing 51 per cent FDI in multi-brand retail. Organised retail has been gaining importance across all segments and as per Cushman and Wakefield’s research; it will attain a 10-11 per cent share by 2020 from a current 9 per cent of the total retail market in India.
Japan continues to occupy a pivotal role in the global economy. As the world’s third largest economy and with the Greater Tokyo Area being one of the largest metropolitan economies, Japan offers a large affluent population, making it one of the most attractive retail markets globally. Osaka has been chosen to host the World Expo in 2025, which will mark 55 years since the last one. There has been a positive reception across the nation as another milestone event will be taken place in Japan after the 2020 Tokyo Olympics.
Lying in the southwestern Pacific Ocean some 1,500km from Australia, it is a small market of some 4.8 million New Zealanders. One third of the population live in Auckland, whilst the other main cities are Wellington, Christchurch and Hamilton. The New Zealand economy has been amongst the western world’s best performing post the global financial crises and the economy has been driven by record levels of population growth, the result of high levels of net migration, the construction sector and a booming tourism sector.
Singapore is a major business and retail hub in Southeast Asia, boasting one of the most preferred destinations for multinational corporations as well as global brands looking to establish their presence in the region. The city-state is a hot magnet for expatriates and tourists, especially from Asian countries. Recent demand indicators are showing signs of recovery and 2017 retail sales have grown from 2016, while international tourist arrivals and spending hit a record high for the second year in a row. The Orchard shopping belt continues to serve as the city’s most prime retail space, with locals and international tourists as its major target market.
Located in a strategic location, Thailand serves as a gateway into the heart of Asia at the centre of the Indochina peninsula in Southeast Asia. Tourism is an important component of the Thai economy with over 38 million visitors per annum. Its economy grew by 2.8 per cent in the first quarter of 2019, compared with 3.6 per cent in the previous quarter. Finally, the retail sales index in Thailand has been steadily rising over recent years, and this trend is expected to continue.
Excerpts above are from the Cushman & Wakefield’s’ Global Retail Cities Guide’ which provides retail overviews of more than 150+ locations spanning 50 countries across the world.
Major projects across Asia-Pacific
The creation of a one-of-a-kind retail hub by developers Shayher Group is well underway as part of the transformation of the iconic Pentridge site in Melbourne’s north. The Pentridge mixed-use redevelopment opportunity is a unique project located in one of Melbourne’s most rapidly gentrifying inner northern suburbs, Coburg. Once complete, the development will feature a boutique, architecturally designed ‘town centre’ with a 2,000sq m Ritchies fine food and wine supermarket, a 15-screen Palace Cinema and 20-25 specialty stores. The first stage of openings at Pentridge Coburg, including the opening of a piazza and the repurposing of a number of heritage buildings, are scheduled to be launched to the public in 2020.
Currently under construction by developers Lendlease with the first stages opening in 2021, Perth will be home to the new Waterbank project. Situated at the eastern entry the Central Business District (CBD) the scheme will be a unique place which offers interaction with the Swan River, riverfront retail, water-based community facilities and home to lifestyle-oriented residents and office workers. Waterbank’s riverside retail will be a hub of casually sophisticated food and beverage amenity and everyday convenience with stunning views of the Swan River. Relaxed, accessible, tactile and distinctly Western Australian in its design and identity, Waterbank will balance its urban character with a strong connection to nature.
Also under development by Lendlease is the Melbourne Quarter project, a new up-and-coming economic centre. Construction commenced in late 2016 and stage one is now complete, which includes One Melbourne Quarter and seven retailers which are opening progressively. In the coming months and years to follow, Melbourne will see this important site rise again as an integrated, layered part of the city.
Prince Smart Garden, a commercial centre project by developers Prince Real Estate Group, Prince City Center in Sihanoukville, Cambodia will officially complete its construction at the end of 2019 to fulfil the needs of luxury accommodation to tourists. Prince Smart Garden, the first part of the Prince City Center project is expected to finish this month and the second and third stages will continuously start its operation. The project’s first phase covers an area of 24,800sq m with a total building area of 79,342sq m, including three condos and one plaza building that incorporates a shopping mall, restaurant, a fitness centre, KTV, library and other services that will bring clients a comfortable living environment.
Newly opened Raffles City Chongqing by developer CapitaLand, with a total investment of RMB24bn and a total construction floor area of 1.12 million square metres, brings together a 235,000sq m shopping mall, 150,000sq m of Grade A office space, 1,400 residential apartments, Ascott Raffles City Chongqing serviced residence and InterContinental Chongqing Raffles City hotel. Located at the confluence of Yangtze and Jialing rivers, Raffles City Chongqing is designed by world-renowned architect Moshe Safdie, who drew inspiration from the region’s thousand years of waterway transportation culture to create an image of powerful sails upon the river for Raffles City Chongqing to symbolise the host city’s surging growth.
Lulu Mall and Hotel, Thiruvananthapuram, is located in the capital and largest city of the Indian state of Kerala. Once opened in 2020 by developers Sobha Limited, Lulu Mall Thiruvananthapuram will be a three-level retail and leisure destination which is located adjacent to the Lulu Hotel. Presenting a new and enhanced shopping destination for the area, the mall boasts 60,531sq m of GLA, and will include a 7,919sq m Lulu Hypermarket and a 7,846sq m Lulu Department Store, supported by a generous 3,000 car parking spaces. A 5,025sq m multiple-screen Cinema, as well as a 4,533sq m Family Entertainment Centre are situated on the top floor of the all, ensuring guests will be able to relax with a generous space dedicated to leisure time. The mall will also boast a unique food experience, suitable for all, which will be scattered throughout the destination, however the main food court will be located on the top floor.
Grandberry Lifestyle Center by developers Tokyu Corporation is a new 70,000sq m mixed-use centre in Tokyo’s Machida section that is scheduled to open this year. Located on the city’s Tokyu Denen-tonshi train line, the design accommodates both a commercial and activity hub as well as a social destination for visitors and nearby residents. Upon arrival, tiered gardens and waterfall meet visitors who then ascend a grand stair to a multi-level shopping scene with a grocery market, retail and cinema. Open plazas provide spaces for socialising, leisure and entertainment. A new park entrance transforms the natural slope into a dramatic stair, with the ground rising to create a green roof for a restaurant at the park’s entrance. In addition to retail, other program elements include a café, library, official Snoopy Museum, multiple children’s playgrounds, forest garden, sports fields and a great lawn for events.
Situated in Kuala Lumpur, Pavilion Damansara Heights is located within the luxury enclave of Damansara Heights. Another project by the prestigious Pavilion Group, this new project will incorporate luxury residences, corporate towers and bespoke retail when it opens in the third quarter of 2021. A vision to set the senses alight, Pavilion Damansara Heights will be a premium lifestyle destination that sets the standard for curated dining, contemporary retail and customised leisure indulgences across 1.1 million square feet of net lettable space and a 500m gastronomic gourmet boulevard. The project is a joint venture between the Pavilion Group, a world-class property developer specialising in large-scale retail and mixed-use developments and Canada Pension Plan Investment Board, one of the top ten largest retirement funds in the world.
A NZ$790M redevelopment of the Westfield Newmarket centre by developers Scentre Group will create a world-class retail and lifestyle destination in the heart of Auckland. Incorporating multiple sites over four and half hectares, Westfield Newmarket will be home to Auckland’s first David Jones department store, a new format Farmers department store, a Countdown supermarket and more than 230 new specialty stores. The new Westfield Newmarket will have a gross lettable area of 88,150sq m and is due for completion in the fourth quarter of 2019. On completion, the centre will reclaim its position as the largest retail complex in Newmarket, catering to a trade area population of almost 555,000 residents.
Opening in March 2020, Commercial Bay is set to become the most transformational project Auckland has ever seen. Never before in New Zealand has a single project brought together the best of everything in one location – a world class commercial space, public transport, luxury hotel, international quality retail, public spaces and hospitality environments, as well as striking urban design. Owned and developed by NZX listed Precinct Properties, Commercial Bay completely reshapes the waterfront area bounded by Britomart, the Viaduct and the CBD, and resurrects the location’s original name. Commercial Bay’s world-class retail environment and the landmark office tower will be completed in April 2020. A 39,000sq m office tower and 18,000sq m of retail will set Commercial Bay as the largest mixed use development in Auckland for decades.
Another project by CapitaLand and with a total gross floor area of approximately 887,000sq ft, the Funan integrated development that opened this year comprises a retail component, two office blocks and lyf Funan Singapore – the Singapore flagship of The Ascott Limited’s lyf co-living serviced residence that is designed by millennials for millennials. Funan is located right in the heart of the Civic District with excellent connectivity, including a direct underpass linking to City Hall MRT interchange station. As a new paradigm for live, work and play in Singapore’s city centre, Funan offers a synergistic combination of retail, office and serviced residence components that is designed to appeal to savvy consumers pursuing quality of life in a socially-conscious and creative environment.
A partnership between Changi Airport Group and CapitaLand saw the opening of one of the biggest projects anywhere in the world this year. Jewel Changi Airport opened back in April and the game-changing development is raising Singapore’s standing as a tourism destination. The 135,700sq m complex at the heart of Changi Airport houses over 280 retail and F&B outlets, one-of-a-kind play attractions, a hotel and aviation facilities within one of Singapore’s largest indoor gardens. It also offers a range of facilities including airport services, indoor gardens and leisure attractions, retail and dining offerings as well as a hotel, all under one roof. These unique offerings in Jewel are envisaged to enhance Changi Airport’s appeal as a premier air hub.
Currently under construction by Frasers Property, One Bangkok will open its first phase in 2023 and become a new global landmark destination – a fully-integrated district in the heart of the city. Once completed, it will be synonymous with Thailand and enhance the country’s stature on the world stage. One Bangkok will set new standards in terms of design, quality, connectivity and sustainability to be the most prestigious corporate address in the city. A vibrant lifestyle destination, it combines hospitality, retail, art & cultural experiences, together with the city’s finest residences.