Retail on the Road to Recovery

While the Chinese market has taken longer to recover, things have picked up quickly in recent months and the whole retail real estate sector is quickly returning to what people expect. Over the coming pages, RLI zones in on the continent to point out a series projects which should have people excited for the future as the industry rebounds and once again puts mixed-use development schemes front and centre.

Although 2022 saw most Asia Pacific (APAC) markets, with the exception of China, begin to shake off the effects of regional Covid-19 restrictions, as investors look to 2023 they find themselves confronted with a different, but no less dangerous, set of threats: high inflation, rising interest rates, unsustainable levels of public- and private-sector debt and an impending global recession. This is the view of PWC in their article ‘Emerging Trends in Real Estate Asia Pacific 2023.

The article continues by speaking about retail, saying that transaction volumes dropped off in 2022, reflecting diminishing interest among mainstream investors for conventional retail assets, although nondiscretionary subtypes continue to find favour. Over the long term, however, well-performing assets in good locations will continue to be successful and margins should begin to improve once landlords and tenants are able to find a successful formula to reimagine assets in ways that work to their mutual benefit.

Meanwhile, CBRE’s ‘2023 Asia Pacific Real Estate Market Outlook’ report highlights that despite rapid change and uncertainty experienced worldwide last year, they retail a relatively positive outlook for the Asia Pacific commercial real estate market in 2023. From an economic perspective, inflation is expected to ease and interest rates in the region are set to stabilise in the second half of 2023. In terms of retail, the report explains that while 71 per cent of retailers plan to open more stores, retailers will remain prudent in extending their presence in new markets. Space in prime assets will remain keenly sought after while interest in secondary retail will strengthen.

Projects Across Asia & Australasia
Back in October, Simon and Mitsubishi Estate Simon, a joint venture between Mitsubishi Estate Group and Simon, announced the opening of Fukaya-Hanazono Premium Outlets, the 10th Premium Outlet centre in Japan and the first new location in Japan in 10 years, located approximately 45 miles northwest of Tokyo. Building on the success of Gotemba and Rinku Premium Outlets and the other seven properties in Japan, Fukaya-Hanazono Premium Outlets will feature 137 brand name stores in 296,000sq ft. Of the stores, twenty-four stores have launched their first outlet centre concept location worldwide or first in Japan. The centre also features an impressive food hall design and several new restaurant concepts consisting of Asian, Western and local Japanese food and beverage options. Fukaya-Hanazono Premium Outlets is built to a modern contemporary architectural design which complements the landscape of the local area, including the red-brick and wood finish that is local to Fukaya City.

MixC Nanjing, Nanjing, China
Developer: China Resources Land

Developed by China Resources Land and opened last year, MixC Nanjing is a, 83,800sq m, retail-led, mixed-use development located in the city’s central 700-year-old district known as Sanshan Street and it is situated within the historical urban texture of the ancient city, at the heart of the site sits an original ‘Yunzhang Gongso’ building. The retail planning for MixC differs from traditional centres and has made a contribution to the city. To support the cultural centrepiece of the design, the commercial retail strategy has been altered. In most retail-led schemes, the focal retail units have the strongest visibility to the external street. In the case of MixC Nanjing, this hierarchy has been restructured to place anchor tenants within the internal pedestrian streets to draw visitors through the main courtyard.

The Splendors Zhangjiagang Shopping Center opened last year and is the prime commercial component of the Zhangjiagang Smart City Development by China Jinmao Group. The site is located within the nucleus of a new High Technology Development District, north of the city and is situated at the confluence of Zhenxing Middle Road and Huachang Road, surrounded by natural river courses and green belts. Peripheral retail developments within a five-kilometer radius are currently inadequate for the expected high-profile population growth within China Jinmao Group’s new Smart City. The philosophy of 3MIX when designing the project was to create a place that fits to its landscape, neighbourhood and lifestyle of its customers.
A game-changing retailtainment destination, 11 SKIES will be Hong Kong’s largest hub for retail, dining and entertainment and the first to combine wealth management and wellness services in one complete ecosystem.

Opening in phases from 2022 to 2025 by New World Development, it is set to bring brand new experiences for consumption, entertainment and wellness services to everyone. 11 SKIES will bring together 3.8 million square feet gross floor area; 2.6 million square feet of retail space, encompassing over 800 shops and more than 120 dining concepts; 570,000sq ft of experience-based entertainment facilities including immersive, fun and interactive role-play learning experiences at KidZania and Grade-A office towers. Strategically located right next to the Hong Kong International Airport, Hong Kong-Zhuhai-Macao Bridge and Tuen Mun-Chek Lap Kok Link, 11 SKIES will benefit from a high volume of passengers who travel through Hong Kong International Airport, which recorded 71.5 million in 2019 and will become a centrepiece within the GBA ‘one-hour living circle’ and a gateway to the rest of the world.

Mall 88, Sydney, Australia
Developer: JQZ

JQZ, a Sydney-based property development firm, has collaborated with Colliers to launch Mall 88, a new shopping destination, in the heart of Sydney’s St Leonards. The mall, which has an 8,000sq m retail space, is designed to be a lifestyle destination for both locals and visitors. Across four levels, Mall 88 features an open-air plaza and dining area with a mix of cafes, alfresco dining and a laneway eat street, as well as a public library and medical centre. According to Julia Batterley, Colliers’ MD of real estate management, Mall 88 is the area’s first modern retail precinct that incorporates a civic plaza and public library. In addition, the mall is anchored by a full-service Coles supermarket, Vintage Cellars, a Medical Centre and an Asian supermarket, as well as a variety of premium dining and service brands spread across 30 retail establishments. The centre also has 374 undercover parking spaces. The reimagined newest retail destination in St Leonards is key to JQZ’s strategy to supply customers with a new “live, work and play” area and fill a retail void on Sydney’s north shore market.

The new 39-storey mixed-used project Park Silom shopping centre is set to launch in June in the heart of Bangkok’s Silom, positioned as a ‘Third Space Retail’. Park Silom, developed under NYE & RPG Company, is a partnership between Thai retail giants – Minor International, Siam Piwat and NYE Estate. The centre’s retail space – which spans 9,300sq m over five storeys – will be managed by Siam Piwat, offering a new retail concept it dubs ‘Everyday Indulgence for New Breed City Living’. The retail space will be home to more than 80 brands, covering lifestyle, fashion, F&B and wellness, along with a premium supermarket. The basement floor ‘The Help & Service’ offers 24-hour shops, parcel-delivery services and supermarkets, while the upper floor features a brunch and all-day dining space called ‘The Balcony’ and a meeting space ‘The Cellar’. ‘The Lobby’ will house chic cafes and ‘The Dining Room’ is dedicated to more up-market restaurants. The second and third floors of the development will house ‘The Dressing Room’ – a collection of fashion and beauty stores – and ‘The Clubhouse & Spa’ zone.

Zhuhai Shizimen Huafa Mall, Phase 2 (Plot A8) by developers Zhuhai Huafa Properties Co., Ltd will have its grand opening on 30 June 2023, with a total GFA of approximately 40,000sq m. This three-storey-high retail project will be positioned as an “Innovative Lifestyle Mall”, which is one of the components of the mixed-use development consisting of 150m-high hotel and office building and 150m-high residential building. The shopping mall is placed along an east-west axis and the outdoor entrance plaza and nodes are designed at the podium below the two towers. The layout design highlights the flexibility, in which a variety of store sizes are designed in the layout plan to flexibly fulfil various tenants’ needs of different business style and requirements. Furthermore, pedestrian flow in the shopping layout has been designed to maximise the flow of people going through each commercial floors.

K11 Ecoast, Shenzhen, China
Developer: New World Development Company

K11 Group has unveiled a new harbour front cultural retail destination in Shenzhen dubbed K11 Ecoast, a flagship for its Mainland China expansion plan. The US$1.4bn project, located in Prince Bay, is scheduled to open at the end of 2024. It is jointly developed by K11’s parent company New World Development Company and China Merchants Shekou Holdings. The development will have a GFA of 228,500sq m, featuring a K11 Art Mall, K11 HACC multi-purpose art space, K11 Atelier office building and a Promenade. K11 Ecoast was designed and constructed in accordance with China’s 14th five-year plan national guidelines, using renewable energy, recyclable materials and hospital-grade air filtering systems. The development includes a 60,000sqm outdoor landscaping, the largest among all K11 projects.

Chongqing Yuelai TOD, Chongqing, China
Developer: Chengdu Wide Horizon Investment Group

Hong Kong-based architectural and design firm CAN is excited to reveal the design for Chongqing Yuelai TOD Project for its client, developer Chengdu Wide Horizon Investment Group. The project bridges the boundaries of ecology and arts for a mixed-use development. The firm is delivering the masterplanning and architectural design for the development which consists of a retail podium, retail precinct and office towers. Located adjacent to Wangjiazhuang Subway Station, the site is a comprehensive transport hub with the seamless connection of major railways, air and sea routes. It is just over 10 kilometres from the central business district, giving it a superior economic position. Inspired by the hilly and mountainous landscapes of Chongqing, the design creates a spatial journey through connecting nature and spaces. The world-class integrated masterplan delicately brings together elements of pedestrian circulation, precinct retail, F&B market, shopping mall, office and different featured spaces in a multi-dimensional approach, creating an iconic gateway integrated green urbanism, creative and cultural hub.

Snøhetta Shibuya Upper West Project, Tokyo, Japan
Developer: Tokyu Group

Snøhetta has unveiled the design for its largest project in Japan to date, a mixed-use development in Tokyo offering retail, a hotel and art and cultural experiences. The 117,000sq m Shibuya Upper West Project by developers Tokyu Group is located in the Shibuya district of Tokyo. Billed as the city’s newest ‘urban retreat’, it is scheduled for completion in 2027. “In such a well-known and historically significant area in one of the world’s most exciting cities, the project is paying homage to and respecting traditions as well as looking ahead,” said Robert Greenwood, Partner and Managing Director of Snøhetta Hong Kong. “We aim to design for the future and aspire to find the most sustainable solutions, contributing to Japan’s goal of being carbon-neutral by 2050.” The project will be developed in collaboration with the adjacent Bunkamara cultural complex, which promotes art and culture throughout Tokyo. According to a news release, the 36-storey building pays tribute to “the distant foothills of Mount Fuji”. Snøhetta plans to achieve the highest possible sustainability ratings for the Shibuya Upper West Project.

The Exchange TRX, Kuala Lumpur, Malaysia
Developer: Lendlease

The Tun Razak Exchange (TRX) is a vibrant, experience-led lifestyle destination that is seamlessly integrated with a 10-acre activated public park. Set to be the new lifestyle epicentre of Malaysia’s capital city of Kuala Lumpur, The Exchange TRX will offer socially immersive experiences encompassing events, entertainment, arts and culture, sports and leisure and over 430 lifestyle, dining, concept stores and new-to-market brands. Designed as ‘a lifestyle precinct in the park’, The Exchange TRX by developer Lendlease sits at the heart of a 17-acre retail-led mixed-use development located in Malaysia’s first international financial district. The Exchange TRX is known as a lifestyle precinct that encompasses retail, Malaysia’s first Kimpton® Hotels & Restaurants that is connected to the TRX City Park, six premier residential towers, a low-rise large floor plate campus-style office and a dedicated Mass Rapid Transport (MRT) station. The entire development is expected to be completed in stages from 2023 –2027, with the retail component opening in Q4 2023.