Magazines Archives - 2008 December

And the exhibitors speak up
Story 8 - Review

At the third ICSC Asia Expo, panellists and speakers at the conference discussed the future of retailing amid a dismal global economic scenario, and concluded that despite the gloomy future, some markets in the Asia-Pacific region — namely, China, Vietnam and India, continue to have potential. Exhibitors at the expo — composed of retail real estate developers — also shared their views on the financial crisis and how they think retail would do in the midst of the turmoil. Jennee Grace U Rubrico reports.

RETAIL developers who were on the exhibit floor of the ICSC Asia Expo 2008 held from October 14-16 were, like other stakeholders of the retail sector, cautiously optimistic about the future of retailing in the region.

The expo, which was held at the Venetian Macao-Resort-Hotel in Cotai Strip, Macau, tackled the global economic downturn and its impact on the retail sector, with industry players concluding that while the US and Europe might suffer heavily from the global financial crisis, a number of retail markets
in the Asia-Pacific and the Middle East have what it takes to weather the storm.

Property developers who exhibited at the expo were of the same opinion, and found no reason to stop expanding retail space, provided that they are erected in the right markets. The Dubai-based Al-Futtaim Group Real Estate, for one, is bullish about entering into joint ventures with companies in India and the rest of Asia.

“We’re rolling out the Dubai Festival City concept internationally towards these areas. We’re looking at India and the rest of Asia. We’re talking to people we can joint venture with,” Peter Young, Al-Futtaim’s director for retail development, told RETAIL ASIA.

The Dubai Festival City is a waterfront lifestyle resort with shopping, dining, entertainment, homes, schools, hotels, office and leisure components.

Young maintained that there is room for the Middle East player in the region, noting that while township projects exist in some markets in Asia, these are “not in the scale of Dubai Festival City”, which encompasses 1,300 acres of property and stretches 3km along the Dubai Creek.

“We believe that our concept is appropriate for emerging markets,” he said.

Young admitted that the financial crisis might slow down retail construction in terms of getting financing, but added that the crunch did not come about as a consequence of the market.

“This is not like [the] 1997 [Asian financial crisis]. The market is still good, and retail sales are good,” he noted.

“It is a crisis within the financial institutions. I believe we need to take some heat down in the market, and I’m hopeful that the market will respond quickly,” he added.

Besides, pockets of opportunities exist, he said, as retail centre developers could also take advantage of the current slump in construction prices.

He added that as retail development takes a long-term view, “the [company’s] business plan remains the same”. Another exhibitor, Swire Properties, the developer of The Village at Sanlitun in Beijing, continues to be bullish about China.

Company director and general manager Jolyon Culbertson said that China, where the company has retail developments, is fairly isolated from the global financial system, making it less vulnerable
than other markets.

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