PDF《1H 2016》

1H

2016 savills.

com.hk/research

01 Asian Cities Report Chengdu Retail 1H

2016 Savills World Research China savills.com.hk/research Asian Cities Report | Chengdu Retail

02 Source: Savills Research &

Consultancy MAP

1 Key retail areas,

2016 Source: Chengdu Bureau of Statistics, Savills Research &

Consultancy GRAPH

1 Retail sales, 2005C2015 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

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Consultancy GRAPH

2 Shopping mall and department store supply and stock, 1995C2018E City overview Recently, Chengdu placed first out of five cities in the

2015 China Fashion Index, the other cities being Xiamen, Shenzhen, Shanghai and Beijing. This is due to Chengdu consumers'

attitudes towards fashion and their willingness to spend, combined with the overall steady economic growth currently being experienced by the city, and current comfortable living standards. In Chengdu, retail sales totalled RMB494.6 billion in 2015, up 10.7% year-on-year (YoY), while the Consumer Price Index increased 1.1% YoY, and maintained a steady growth throughout the year. Primary markets Chunxi Road Located in the CBD, Chunxi Road (totalling 386,372 sq m of prime retail space) is the most well-known retail district in the city. Influenced by the presence of popular brands and the attractiveness of iconic shopping malls C International Financial Square (IFS) and Tai Koo Li C Chunxi Road is becoming more attractive to high-end brands. The last few years has seen many international brands opening their first store in Chengdu or even in Western China. The Chunxi Road area receives most attention due to the larger, more accommodating space available in the newer projects which has assisted in enabling the largest Louis Vuitton and Gucci flagship stores in Western China to open. Well-known fashion brands such as Alexander McQueen and Van Cleef &

Arpels have also opened. Yanshikou The Yanshikou area (totalling 140,806 sq m of prime retail space) was once the epicentre of the Chengdu high- end commercial district. However, due to the opening of Tai Koo Li and IFS on Chunxi Road, Yanshikou is now contending with a new set of challenges. After opening stores on Chunxi Road, some high-end brands have had to leave Yanshikou due to limitations in consumer purchasing power. For example, Gucci, Dior, Hugo Boss, Tiffany and Fendi all closed their stores in Yanshikou after opening in Tai Koo Li or IFS. However, opportunities have also presented themselves as some high-end brands (Lavin, Loewe and Paul Smith, for example) have chosen to expand their current stores in Yanshikou as well as opening a second store in Chunxi Road. In addition, some high-end prime shopping malls in the area have begun to adjust their current retail format in an attempt to increase footfall. As well as introducing new high-end brands to the shopping malls, they are also introducing more catering and entertainment. For example, the Yanlord Landmark Shopping Mall has introduced more restaurants which are predominantly targeted at attracting white-collar workers from the surrounding office buildings. Secondary markets Following the trend of retail market decentralisation, more prime shopping malls have been built in secondary markets. Areas such as the South Railway Station District and the Jianshe Road area have gradually become influential retail areas due to the launch of new projects and the active adjustment of the tenant mix in existing projects. In addition, newer, developing areas, such at Financial City and Shuangnan, are on the rise and are expected to become influential areas in the future. South Railway Station District With the launch of several mixed-use projects, such as CapitaMall Tianfu, as well as market positioning and tenant mix in projects such as the Suning Plaza and GTC Galleria Plaza, the South Station District (totalling 868,000 sq m of retail space) has gradually grown to become an influential commercial district in Chengdu. Jianshe Road Jianshe Road (totalling 262,000 sq m of prime retail space) has witnessed a polarised shopping mall performance so far in 2016. Some malls in the area have experienced a loss of tenants and increased vacancy rates due to poor property management strategies and positioning. However, other malls

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0 5,000 10,000 15,000 20,000 25,000 30,000 million sq m '

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2016 savills.com.hk/research

03 GRAPH

4 Retail rental index, 2009C2015 Source: Savills Research &

Consultancy TABLE

1 Selected future supply,

2016 Source: Savills Research &

Consultancy GRAPH

3 Prime retail supply distribution, 2006C2015 Source: Savills Research &

Consultancy have actively adjusted their tenant mix by adding more restaurants and entertainment tenants to their current retail format in an attempt to attract more consumers and increase footfall by providing a better shopping experience. Dayuan In Q4/2015, Intime City entered the market and brought with it 120,000 sq m of new supply. The entry of Intime City pushed stock in Dayuan up to 342,000 sq m. Due to the increased competition, some projects have begun to actively adjust their retail formats and attempt to differentiate themselves from other projects. For example, the Forte Business Center is introducing health care tenants in order to integrate more services into the shopping mall and offer a more integrated experience for consumers. Financial City Financial City (totalling 530,000 sq m of prime retail space) is experiencing a structural and brand positioning adjustment. For example, the Aux has introduced more fast-fashion brands such as SPAO and OCE and it also plans to incorporate more themed restaurants into the Centre in the coming years. The launch of planned projects, Yintai Center in99 and the Cosmo International Center, are expected to upgrade the whole Financial City area. Due to the project positioning and the strong leasing capability of the Yintai Group, after the launch of the Yintai Centre in99, Financial City is expected to become another area in Chengdu which is host to a cluster of high-end brands. Shuangnan The Shuangnan area (totalling 488,000 sq m) was one of the first residential areas to mature in Chengdu and has both a high population density and substantial spending power. Until Q3/2015, this area lacked a large, prime shopping mall. However, with the launch of both Longfor Jinnan Walk and Joy City, this gap in the market has now been filled. Longfor Jinnan Walk and Joy City have brought into the area a number of fast fashion, sports, catering and entertainment brands. These include;

SPAO, Survival Climbing Gym, and Ivimovie, which also provides a private theatre. Rents Shopping mall first-floor rents increased 0.4% quarter-on-quarter (QoQ) in Q4/2105, to RMB17.4 per sq m per day. Due to increased competition from new projects, landlords are wary of implementing significant rent increases in order to sustain their current tenant mix. Market outlook Due to the large amount of new land supply, delayed launches, financial pressure and leasing progress,

2016 is expected to witness an increase in supply. Furthermore, non-prime areas are expected to receive the majority of supply and will account for more than 90% of the total GFA in Chengdu. In an attempt to stand out from their competition, shopping malls will begin to actively adjust their current tenant mix. This is expected to upgrade the retail environment by including a greater variety of brands and more innovation in terms of formats, themes, and operating methods. As the growth of luxury brands in the China market slows, brands are becoming more cautious about making expansion plans. The current high-end market is overly saturated and the expansion of luxury brands is expected to slow down as a result ? Prime area 12% Non-prime area 88% Project Retail GFA (sq m) Wanda Plaza Qingyang 青羊万达 170,000 Shouzuo Max 首座Max 27,000 Yintai Centre 银泰中心 190,000 Star Plaza 星汇广场 120,000

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