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Magazines Archives - 2010 Nov
China and India to see substantial mall growth by 2013, says report
Story 8 - Property Update
 TWO of Asias economic behemoths, China and India, are expected to see a substantial increase in shopping centre supply over the next two to three years, riding on the back of improving retail sales and returning consumer confidence, a new report by global property consultant Jones Lang LaSalle said in September this year.
According to the companys Global Market Perspective September 2010 report, consumer spending in the Asia-Pacific region remains strong, underpinned by employment growth not only in emerging markets, but also in mature economies such as Australia, Singapore and Hong Kong.
Citing a recent survey by UKbased market research group, Ipsos MORI, which revealed marked changes in consumer confidence across 24 countries globally, the report noted that a high level of optimism was identified in the BRIC (Brazil, Russia, India and China) economies, where a combination of cyclical and structural factors are boosting consumer activity.
In light of the shift in consumer sentiment, the study pointed out that the shopping centre development market is regaining a degree of momentum, with mall refurbishments and a new appetite for asset management picking up.
Shopping centre development activity is showing signs of improvement, albeit tentatively in most mature retail markets. Some projects previously put on hold due to poor leasing prospects are under way again, and are being remarketed by developers, often with a new spin. Most of Asias retail property markets are now in the midst of a major development cycle, particularly China and India, it observed, adding that vacancy rates in both countries are expected to trend upwards.
The report continued that the region has seen the largest improvements in investment volumes, not far below pre-crisis [levels].
Retail is the one sector that all parts of the investment community are targeting as they tap into favourable demographic and buoyant consumer markets, the study stated.
China is a key target for crossborder investors; Grosvenor, Lend Lease, Pramerica, Redevco and Macquire are all active, it noted.
The study revealed that regulatory progress is needed to boost further investor demand. It explained: Over the medium term, the anticipated relaxation of FDI (foreign direct investment) restrictions in India could open up the market to both investors and retailers.
In China, insurance regulators have recently announced a long-awaited revision of its rules, allowing insurance companies to invest as much as 10% of their assets in commercial real estate this is releasing a huge wave of funds that will target higher-quality investment grade property within the country. ra
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