Shopping Centers Today

MAY 2012

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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is spoken for at least six months before, according to Sebastian Skiff, the execu- tive director for Asia at CBRE Retail, in Beijing. "To date, we have seen the new malls in Shanghai open at almost 100 percent occupancy, with the balance of space, plus or minus 5 percent, be- ing leased soon after completion," Skiff said. "Those that have opened in 2011 were close to 100 percent occupied, and those to open in 2012 are all largely committed already." Despite the low vacancy rate, land- lords have been introducing new, higher-paying retailers into their prop- erties by moving older tenants out of the choicest ground-floor spaces when the leases are up. Grand Gateway Plaza, Hong Kong Plaza and Lippo Plaza all upgraded their brand mix last year, Skiff says. At the same time, recently opened centers, including the IFC and The Metropolitan have taken in top re- tailers from other properties, thus open- ing up spaces for others. Major projects set to open this year include International APM, on Developers are set to add 580,000 square meters of retail space in the prime markets by the end of this year, and an additional 990,000 square meters in Shanghai's nonprime markets. Hua Hai Road; Jing'an Kerry Center and Reel, on Nanjing Road West; L'Avenue, in Hongqiao; The North, in Putuo; and Rendevouz, near the Jing'an Temple. "The process of re- placing lower-tier brands is a natural evolution in a market that has seen tremendous growth in both con- sumer affluence and fashion sensibil- ity," Skiff said. Developers are set to add approxi- mately 580,000 square meters of retail space in the prime markets by the end of this year, and an additional 990,000 square meters in Shanghai's decen- tralized or nonprime markets, accord- ing to Jones Lang LaSalle. That is up markedly from last year, when develop- ers brought out some 24,000 square meters and boosted Shanghai's retail real estate supply to some 3.1 million square meters. This year's injection of space will raise the vacancy rate only slightly and briefly, the firm says, to be followed by a rapid absorption lease- up. Call it developers' heaven. SCT 196 SCT / MAY 2012

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