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  • Knight Frank and CBRE|WTW Market 55-Storey Menara Tun Perak

    Knight Frank and CBRE|WTW Market 55-Storey Menara Tun Perak

    Knight Frank Malaysia and CBRE|WTW have been jointly appointed to advise on the proposed investment opportunity in Menara Tun Perak, bringing the landmark 55-storey commercial tower in central Kuala Lumpur to market.

    Completed in 1988, the 244-metre building along Jalan Tun Perak previously served as the headquarters of Malayan Banking Berhad (Maybank). The former Menara Maybank sits near Merdeka 118, Chinatown, Petaling Street, Central Market and Dataran Merdeka, giving investors exposure to commercial, heritage and tourism precincts.

    The advisory team is marketing the skyscraper for partial or full investment structures. Prospective plans include ongoing commercial use, asset enhancement or repositioning into hospitality, serviced accommodation and mixed-use development, subject to feasibility assessments and regulatory approvals.

    Structure and Conversion Options

    Transit access anchors the property’s location. The site sits roughly 450 metres from Masjid Jamek LRT Station and 550 metres from Plaza Rakyat LRT station, connecting commuters to three RapidKL train lines, Kelana Jaya, Ampang and Sri Petaling, across the Klang Valley.

    Surrounding blocks have seen an emergence of boutique hotels, hospitality concepts and lifestyle destinations, supported by growing tourism activity and the revitalisation of Chinatown and its neighbouring streets.

    “Menara Tun Perak represents a unique opportunity to invest in a property that has played an important role in shaping Kuala Lumpur’s skyline and commercial history. Landmark assets of this nature, particularly those located within the city’s historic core, are rarely made available for investment.

    With the continued revitalisation of central Kuala Lumpur and growing interest in the surrounding heritage and tourism precincts, the property offers considerable potential for investors with a long-term vision to preserve and enhance its legacy while exploring opportunities to unlock further value.”

    James Buckley, Head of Capital Markets at Knight Frank Malaysia, noted that the asset allows buyers with a long-term vision to explore opportunities to unlock further value as downtown rejuvenation proceeds.

    “Menara Tun Perak’s strategic location within Kuala Lumpur’s historic city centre, coupled with its architectural prominence and established identity, presents an interesting proposition for investors. As the surrounding precinct continues to evolve, we see opportunities for the property to benefit from the ongoing rejuvenation of the city centre and increasing demand for well-located assets with the flexibility to accommodate a variety of potential uses.”

    Next Steps for Bidders

    For further enquiries, prospective investors can contact jointly appointed agents James Buckley at Knight Frank Malaysia and Marcus Yeo at CBRE|WTW as marketing outreach progresses.

  • Australia Post Signs 99-Year Lease to Transform Brisbane GPO

    Australia Post Signs 99-Year Lease to Transform Brisbane GPO

    Australia Post finalized a 99-year leasehold agreement in October 2026 to transform Brisbane’s heritage-listed General Post Office into a mixed-use retail and commercial precinct.

    Real estate investment management and advisory firm Mackwell secured the long-term lease for the 1872 property at 261 Queen Street, marking the first time the site has been offered to the market.

    Under the agreement, Mackwell will reconfigure the historic building into new office accommodation and retail spaces. Australia Post confirmed it will retain its full suite of postal services within the precinct without interrupting regular trading hours. CBRE Capital Markets, Offices, Queensland brokered the transaction.

    Queen Street Mall Link and Commercial Strategy

    The overhaul connects the property directly with foot traffic from the adjacent Queen Street Mall retail corridor. Australia Post Group Chief Financial Officer Craig Roberts said the deal allows the state-owned postal operator to monetize dormant floor area.

    “We know how important our services are to the community and the Post Office will continue to operate from this site, ensuring CBD workers and residents have easy and convenient access,” said Craig Roberts, Australia Post Group’s CFO.

    Mackwell Managing Director John Robson intends to pitch the heritage asset as high-end boutique commercial space. Preserving stone masonry while cutting in modern building services and vertical circulation will form the primary engineering cost.

    Capital Recycling Ahead of the 2032 Games

    State infrastructure authorities and commercial property developers are racing to modernise Brisbane’s central business district before the city hosts the 2032 Olympic Games. Private capital continues chasing inner-city parcels that carry established foot traffic rather than speculative peripheral builds. Long-dated ground leases offer public corporations upfront liquidity while retaining freehold title over crown land.

    For regional retail landlords, the entry of refurbished character space places pressure on standard institutional office towers along Queen Street. Heritage retail tenancies often command rental premiums from luxury fashion and food operators seeking distinct architecture rather than standard mall shells. Mackwell carries the leasing risk if corporate tenant demand for central Brisbane floor space softens during construction.

    Operational Counter Hours and Next Steps

    The building was purpose-built for the Australian postal network in 1872. The public entity has spent the last decade rationalising physical post shops as parcel volumes eclipse traditional letters, offloading or repurposing metropolitan real estate to fund automated parcel hubs.

    Counter operations at 261 Queen Street will maintain existing schedules during early construction work, trading Monday through Friday from 8:30am to 5:00pm and Saturday mornings until 12:30pm. Mackwell will submit formal heritage architectural filings and tenancy configurations to local planning authorities before physical building works commence on site.

  • Mirvac Sells Brisbane Office Complex to Alceon for A$124 Million

    Mirvac Sells Brisbane Office Complex to Alceon for A$124 Million

    Mirvac has agreed to sell a twin-tower office complex and adjoining public car park on the northern edge of Brisbane’s city centre to local investment manager Alceon for A$124 million ($87 million).

    Alceon announced on Wednesday that contracts have been exchanged for 410 Ann Street and the neighbouring Cathedral Square car park at a fully leased yield of 11 percent. The transaction prices the asset at about A$6,000 per square metre, falling below A$4,000 per square metre once the excess car parking is stripped out. Mirvac is exiting the property through a separately managed account.

    Yields Split Between Prime and Secondary Stock

    Marking Alceon’s 15th Brisbane office purchase, the deal expands its bet on secondary-grade buildings as city-centre vacancy dropped to 10.2 percent in July. Prime space in the city saw gross effective rents rise 11.8 percent in the third quarter from a year earlier, lifting cumulative gains since 2022 to 47 percent.

    The pricing gap between institutional prime towers and secondary stock in the city has widened sharply. Institutional buyers have paid roughly double the square-metre rate for premium assets, while secondary properties trade at heavy discounts to replacement cost. With 10-year bond rates hovering near 5.35 per cent, buyers of older stock rely on double-digit yields and hands-on leasing turnarounds to make underwriting hurdles pencil out.

    For office landlords and commercial operators, the transaction demonstrates that capital liquidity remains selective rather than frozen. Private syndicators and high-net-worth capital pools are absorbing secondary buildings that institutional funds are paring back. The core risk rests in capital expenditure demands, as incoming landlords must commit fresh funds to older floorplates to compete against premium stock offering stronger sustainability credentials.

    Car Park and Transit Connections

    The Ann Street property occupies a 4,052 square metre freehold parcel containing more than 20,000 square metres of net lettable area and 139 internal parking bays. Beside the towers, the Cathedral Square facility adds 572 vehicle bays across an 8,949 square metre site held under a leasehold tenure running until April 2108.

    Commuter access sits close to the asset, located 375 metres from Brisbane Central Station and near works on the subterranean Cross River Rail network. The complex holds a 5.5-star NABERS Energy rating and a 3.5-star NABERS Water rating under national benchmarking standards.

    “This is a well-located asset that has been under-managed for some time,” said Todd Pepper, managing director and head of Alceon’s Queensland business. “Our plan is hands-on: invest in the building, lift the tenant experience and lease it up into a market where good space is getting harder to find.”

    Planned Capital Works and Lease Expiries

    Alceon intends to refurbish the entrance lobbies, shared amenities and empty office floors to lift the asset to a contemporary B-plus grade. Existing leases run across an occupancy level of roughly 90 per cent with a four-year weighted average lease expiry, anchored by the Public Trustee of Queensland, First Parking, Mipac, Sonic Healthplus and Dye & Durham.

    The transaction follows a comparable secondary deal completed in September, when Quintessential Equity purchased 133 Mary Street from ESR Group for A$81.8 million, or roughly A$6,200 per square metre. That asset also included retail space targeted for a refurbishment program. By contrast, Barings paid A$700 million for 480 Queen Street in July at A$12,727 per square metre, while GPT Group acquired Central Plaza II at 66 Eagle Street for A$400 million in April at A$12,561 per square metre.

    Brokers Peter Chapple and Bruce Baker of CBRE handled the transaction alongside Paul Noonan and Jack Sullivan of JLL. Alceon financed the purchase via its network of wholesale and high-net-worth backers, pushing its Queensland commercial property portfolio past A$1.25 billion under management.

    Near-term performance now depends on tenant retention, with almost half the total floor space at 410 Ann Street scheduled for contract renewal across 2028 and 2029.

  • Asian Brands Drive Tokyo Retail Vacancy to Zero as Ginza Rents Hit 298,000 Yen

    Asian Brands Drive Tokyo Retail Vacancy to Zero as Ginza Rents Hit 298,000 Yen

    Asian consumer brands pushed street-level retail vacancies to zero across three of Tokyo’s four premier shopping districts during the second quarter, driving contract rents to record highs.

    Roadside retail vacancy in Shinjuku dropped to 0%, matching Ginza and Shibuya, while Omotesando-Harajuku fell to 0.1%, according to quarterly market data from CBRE.

    Regional fashion, fragrance and lifestyle labels are competing directly with established European and American luxury houses for ground-floor space. In Ginza, average monthly contract rents reached 298,000 yen ($1,881) per 3.3 square metres in the April-June quarter, a 0.7% increase from the previous year. Rents in Omotesando-Harajuku rose 1.6% to 256,000 yen per unit, while Shibuya climbed 2.7% to 187,000 yen. Shinjuku posted a 2% gain, also reaching 187,000 yen.

    Surging Demand Outbids Asking Prices

    Leasing agents report that intense competition is forcing tenants to pay above initial landlord rates to secure prime foot traffic. Bidding wars between incoming international retailers and domestic operators have pushed final transaction values past listed rates across core commercial arteries.

    Asian brands made up 17.5% of all companies planning to open roadside stores in major Japanese cities within twelve months as of June, nearly doubling from 9.3% in June 2025. This influx has depleted available high-street supply, leaving landlords with waiting lists for prime corners.

    Retailers treat Tokyo flagships as international marketing platforms rather than simple revenue outposts. Brands from South Korea and Southeast Asia use high-visibility stores in Harajuku and Aoyama to build credibility with both domestic Japanese shoppers and overseas tourists before expanding into broader Asian and Western markets.

    New Flagships Anchor Core Corridors

    South Korean apparel label Matin Kim, operated by e-commerce company Hagohaus, opened a standalone store in Harajuku in April after testing customer demand through temporary pop-up locations. Securing the space took twelve months of negotiations amid minimal market turnover.

    Thai luxury fragrance maker Panpuri, operating under Japanese cosmetics group Kose Holdings, opened an Aoyama flagship in August. The location offers bespoke fragrance blending on the ground floor and is scheduled to add a second-floor wellness spa later this month. Panpuri runs 31 stores across Thailand and selected Tokyo as its primary vehicle for international exposure.

    South Korean eyewear brand Gentle Monster has also broadened its footprint in the capital. The company added a street-level store in Ginza in August last year, following its initial Japanese opening in Aoyama in 2024.

    Shift in Tenant Mix and Landlord Power

    For commercial landlords, the aggressive arrival of Asian lifestyle names diversifies retail corridors long dominated by Western fashion conglomerates. Property owners in Omotesando and Ginza now have alternative tenant pools capable of absorbing record per-tsubo rental rates on multi-year commitments.

    The shift carries operational risks for incoming brands unfamiliar with Japan’s steep operating costs. High renovation expenses, rising staffing outlays and climbing rent hurdles require sustained sales volume once initial opening hype fades. Independent labels relying solely on tourist traffic remain vulnerable to foreign exchange fluctuations.

    Rival retail operators in Seoul and Singapore face increased pressure as Tokyo reasserts its role as the preferred testing ground for regional flagship concepts. Brands that previously targeted Hong Kong or Singapore for their primary cross-border show now allocate capital expenditure to Tokyo’s central wards to reach a denser mix of affluent Asian travelers.

    Expanding Store Pipelines

    Demand began accelerating late last year as inbound travel volumes rebounded and pedestrian traffic returned to pre-2020 levels across Tokyo’s transport hubs. Early retail entrants absorbed secondary side-street units throughout late 2025 before escalating their bids for main-street roadside frontage in early 2026.

    Brokers expect supply constraints to persist through the final quarters of the year. With virtually no new street-level retail development underway along Omotesando-dori or Ginza’s Chuo-dori, prospective tenants must wait for lease expiries or buyout opportunities.

    Leasing negotiations now turn toward early 2027 handover dates, with several regional fashion groups actively seeking ground-floor locations across Shibuya and Harajuku before year-end property allocations close.

  • Hanoi Grade A Towers Add Retail Floors as Office Pipeline Hits 495,000 Sq M

    Hanoi Grade A Towers Add Retail Floors as Office Pipeline Hits 495,000 Sq M

    Hanoi commercial developers are allocating ground floors and podium levels to retail tenancies to protect leasing rates ahead of 495,000 square metres of new Grade A office supply entering the market by 2028.

    Eighteen office projects, concentrated heavily in Hanoi’s western business district, are introducing dedicated retail, dining and wellness hubs to compete for multinational tenants.

    The Starlake Model and Layout Shifts

    Parc Hanoi, a Grade A office project in the Starlake township, has dedicated its entire ground floor to consumer retail and dining. The developer placed a wellness centre, meeting suites and open event spaces across Level 2, pairing physical workspace with consumer services in a bid to secure corporate leases.

    The push reflects shifts in corporate occupier demands across Southeast Asia. A CBRE occupier survey showed 92 per cent of corporate respondents ranked collaborative zones and lifestyle amenities as critical to employee retention and productivity, while 64 per cent prioritized green spaces and natural ventilation.

    Regional Blueprints in Singapore

    Hanoi landlords are replicating models tested in Singapore, where mixed-use office towers use food and beverage to generate revenue outside core business hours. The PLUS tower in Raffles Place runs two floors of retail, gyms and spas underneath prime office suites.

    Marina One in Singapore operates 14,000 square metres of commercial floor plate across its retail podium, The Heart. That space combines supermarkets, gyms and food operators that draw foot traffic through the weekend, ensuring seven-day tenant revenue rather than relying purely on weekday office workers.

    Yield Risks for Commercial Landlords

    Integrating retail into Grade A office towers shifts the commercial risk profile for developers. Office leases in Hanoi typically run on fixed three-to-five-year commercial terms, whereas food and lifestyle tenants require lower base rents, revenue-share structures and higher capital outlays for exhaust, plumbing and grease traps.

    Landlords that misjudge the mix face dead ground-floor space that damages the building’s corporate positioning. Success depends on securing anchor food and convenience brands that turn daily office footfall into steady cash flow without crowding corporate lobbies.

    Supply Pipeline Builds in Western Hanoi

    The developer push comes after five years of decentralized expansion across Hanoi, where western districts drew corporate tenants away from the central Hoan Kiem district. The western submarket now accounts for the largest share of modern floor space under construction in the city.

    Developers will deliver the bulk of the 495,000 square metres across western Hanoi over the next 24 months. Leasing teams are tracking whether podium retail commitments can hold Grade A effective rents steady as all 18 towers open for handover before the end of 2028.

  • Nearly 20% of Asia-Pacific Firms Expect AI to Cut Office Space, CBRE Finds

    Nearly 20% of Asia-Pacific Firms Expect AI to Cut Office Space, CBRE Finds

    Nearly one-fifth of surveyed companies in the Asia-Pacific region believe wider adoption of artificial intelligence will reduce their real estate needs, a study by property consultancy CBRE has found.

    More than half, 56 per cent, held a neutral view, believing either that AI had no impact on office space demand or that it was too early to determine its effect, while 25 per cent said AI adoption would require them to expand their office footprint.

    The survey of 651 corporate real estate executives, conducted between May 26 and July 10 across nine regional markets, showed that AI currently has a more significant impact on office operations than on physical space requirements, according to Ada Choi, head of research for Asia-Pacific at CBRE.

    Operational Shift Outpaces Desk Reductions

    Corporate deployment of machine learning in property management expanded sharply over the past two years. The survey, conducted between May 26 and July 10 across nine markets including Hong Kong, mainland China, Singapore, Japan, Australia and India, found that 46 percent of occupiers now classify themselves as active AI adopters in corporate real estate functions. That represents a steep increase from 9 percent recorded in 2024.

    Automation currently assists facility monitoring, leasing analytics, space planning and workplace energy management rather than eliminating core real estate demand. Property teams use algorithmic tools to streamline building maintenance schedules and track daily badge swipes, turning automation into an administrative efficiency tool rather than a headcount guillotine.

    Regional leasing patterns show that companies rebalance rather than abandon their commercial leases. Fifty percent of surveyed occupiers project portfolio expansions through 2029, with 60 percent citing organic corporate growth as the primary catalyst.

    The Flight to Prime CBD Assets

    Commercial tenants are executing a deliberate flight to quality across major Asian financial centres. Eighty-five percent of surveyed occupiers specify Grade A buildings or higher for future commitments, and 48 percent demand space inside central business districts.

    This consolidation into top-tier commercial towers squeezes secondary and decentralised office parks. Landlords holding modern assets with green credentials and flexible floorplates capture leasing activity, while older secondary stock faces structural vacancy as corporate tenants offload low-grade square footage to fund premium addresses.

    The bifurcation penalises owners of dated suburban business parks who banked on decentralisation during earlier cost-cutting cycles. Institutional capital in Asia is now forced to either invest heavily in asset enhancement programmes or accept prolonged rent discounts to retain secondary tenants.

    Stabilised Attendance Anchors Space Requirements

    Physical workplace presence has normalised across the region at levels far higher than in North America or Western Europe. Eighty-eight percent of respondents confirmed their employees work in the office at least three days per week, marking the highest rate recorded since the start of the pandemic. An additional 85 percent stated that desk attendance has reached a permanent equilibrium.

    “With attendance and utilisation largely stabilised at higher levels, companies are no longer focused only on bringing employees back to the office,” said Tom Gaffney, head of leasing for Asia-Pacific at CBRE.

    Space shortages are most acute in Tokyo and major Indian tech hubs, where tight supply limits available Grade A options. In mainland China, corporate expansion continues at a measured pace, led by domestic technology, software development and clean energy enterprises taking advantage of softened prime rental rates in top-tier cities.

    Labour Market Realities and Future Leases

    The resilience of physical leasing contrasts with broader corporate polling on long-term workforce headcounts. A World Economic Forum survey conducted last year across 55 economies found that 41 percent of employers planned to reduce headcount as software automated standard white-collar tasks, raising questions about future desk utilisation.

    Asia-Pacific commercial occupiers have sidestepped immediate floorplate cuts by redirecting automated productivity gains into higher transaction volumes and new service lines. Corporate real estate directors are structuring three- to five-year leases around steady headcounts while monitoring whether generative workplace tools eventually alter administrative staffing models.

    Commercial landlords now watch the final quarter of 2026, when a heavy schedule of prime Hong Kong and Tokyo lease renewals will test whether tenant expansion pledges turn into binding long-term contracts.

  • Royal Holdings and RB Capital Buy Singapore Scotts Square for $245 Million

    Royal Holdings and RB Capital Buy Singapore Scotts Square for $245 Million

    Royal Holdings and RB Capital have agreed to buy the Scotts Square shopping centre in Singapore from Wharf Estates Singapore for $245 million. The deal values the Scotts Road property at S$310 million.

    CBRE brokered the transaction. The sale covers a four-storey luxury retail podium with 130,875 square feet of gross floor area and roughly 76,660 square feet of net lettable space next to the Orchard Road shopping belt.

    Valuation Shifts and Prime Yields

    The agreed price reflects a discount from earlier seller expectations. Wharf Estates Singapore first marketed the retail asset in 2024 at $346 million, then cut that target to $300 million as institutional buyers pushed for higher yields.

    Talks accelerated in August after inquiries began at around $253 million, according to the Business Times. Completing due diligence allowed the parties to lock in the final $245 million valuation ahead of a planned closing before the end of the year.

    Luxury Footprint and Tenant Demand

    Scotts Square maintains an occupancy rate of nearly 99 per cent. Anchor luxury tenants include French fashion house Hermes, Christian Louboutin and Vivienne Westwood, supported by streetwear labels, technology retailers and art installations across four floors.

    For landlords along the Orchard corridor, the transaction sets a clear benchmark for boutique luxury retail space outside mega-malls. While larger landlords rely on heavy tourist traffic and mass entertainment, the buyers are betting on compact footprints with top-tier international brands that retain tenants.

    Capital expenditure remains the central risk for the new owners. Retaining luxury anchors requires continuous asset enhancement, especially as competing developments along Orchard Road upgrade their podium spaces for regional luxury spending.

    RB Capital and Royal Holdings will take full operational control of the retail asset when the acquisition closes before the end of December.

  • Australia CBD Retail Vacancy Rises to 10.8% on Melbourne Supply Wave

    Australia CBD Retail Vacancy Rises to 10.8% on Melbourne Supply Wave

    Australia’s central business district retail vacancy rate rose 40 basis points to 10.8 per cent in the first half of 2026 as fresh retail completions in Melbourne added new space.

    A survey of 5,669 retail tenancies across five state capitals by real estate services firm CBRE showed that shop vacancies declined in four of the five cities, leaving Melbourne as the lone driver of the national increase. Melbourne’s CBD vacancy rate climbed 160 basis points to 8.1 per cent following the launch of two retail centres. Sydney held the tightest retail core in the country, with vacancy standing at 5.3 per cent.

    State Capital Breakdown

    Adelaide posted the sharpest improvement among metropolitan centres, where retail vacancy dropped 130 basis points to 10.4 per cent. Brisbane recorded an 80-basis-point decline to 16.7 per cent, while Perth edged down 10 basis points to 18.5 per cent.

    Physical retail space in Australian city centres remains structurally tight over the long term. CBD retail stock accounted for just 4.2 per cent of total new retail supply built across the country over the past decade, limiting the risk of prolonged oversupply even as consumer budgets tighten.

    Luxury and Experiential Demand

    Foot traffic gains from returning office workers, inbound tourists, and major events have kept cash registers moving in primary shopping strips. Luxury brands and premium apparel retailers continue to take prime floor space in Sydney and Melbourne, competing directly against dining and wellness concepts that landlords rely on to anchor footfall.

    For retail property operators across the Asia-Pacific region, Australia’s low single-digit prime core vacancies mirror similar supply squeezes in Tokyo and Singapore. Landlords in secondary locations, however, face longer leasing cycles as retail groups focus their capital expenditure almost exclusively on high-traffic street corners and flagship malls.

    Leasing agents now turn their attention to absorption rates in Melbourne’s two newest downtown complexes over the second half of 2026, which will determine whether the city’s vacancy rate stabilizes before next year’s development pipeline delivers.

  • Phnom Penh Megamall launch delayed

    Phnom Penh Megamall launch delayed

    The Phnom Penh Megamall developer has delayed the mall’s launch until the fourth quarter of this year owing to lagging interior design work, according to its marketing representative CBRE Cambodia.

    The 47,000sqm, 11-storey shopping hub is being constructed as a mixed-commercial centre.

    “The delay has nothing to do with market issues,” said CBRE Cambodia MD Ann Sothida. “Companies have expressed their interest and have leased about 70–80 percent of the building’s retail space, with the ninth floor entirely leased out.”

    According to local news media reports, the Phnom Penh Megamall, which is being constructed in the building which used to house a Parkson department store, requires additional foundation works unexpectedly when the project commenced.

    CBRE Cambodia reports 19 buildings in Phnom Penh currently offering 314,000sqm of retail space in total, with an additional 261,746sqm in retail space supply expected to launch this year.

  • Competition increases in Bangkok market

    Competition increases in Bangkok market

    Competition is increasing in the Bangkok retail-property market, according to international property consultant CBRE.

    The competition is focused on the bricks vs clicks sector as e-commerce grows, and the bricks vs bricks market, as developers build new malls.

    “All over the world, e-commerce is challenging traditional retail stores, and Thailand is no exception,” said CBRE in a report.

    Currently e-commerce only forms a small percentage of total retail sales in Thailand, but CBRE expects that to change rapidly.

    In the UK, 18 per cent of retail sales are now online rather than through traditional stores.

    Globally, retail tenants are having to pursue an omnichannel approach with both online e-commerce sales and offline traditional sales in stores. In many cases, this has led to a rationalisation of their retail portfolio and a reduction in the number of stores.

    In the Bangkok retail-property market, the threat to landlords is not just from the rise of e-commerce, but also from the increase in supply.

    2019-03-18 - Retail Supply in Bangkok

    Based on the latest survey by CBRE Research, there is more than 600,000sqm of space under construction due for completion by 2023, mainly in large-scale shopping malls like EmSphere, Bangkok Mall and One Bangkok. There are also new malls being planned where construction will start soon, such as the redevelopment of the Dusit Thani Hotel.

    Competition in the Bangkok retail-property market is going to be fierce and landlords are going to have to adapt to the new environment to survive. That, according to CBRE Research, will mean big changes to their business model.

    Historically, landlords have leased out space on three-year leases at monthly rents. Landlords have set rents based on the tenant’s ability to pay driven by business type, size of shop, which floor in the building and which location on the floor. Landlords have tried to extract as much rent as the tenant can afford to pay with the tenant bearing the obligation of a fixed amount of rent and assuming much of the business risk.

    Now the business model is changing with tenants wanting the landlord to share more of the risk by basing the rent on a percentage of the tenant’s revenue, known in Thailand as a Gross Profit (GP) rent.

    The landlord, along with the tenant, will benefit if business is good, but suffer if business is bad, with the landlord not only taking a risk on the ability of the mall to attract customers but also on the success of tenant’s business.

    Landlords are also now expected not just rent space but to be data providers and analysts.

    Tenants now want landlords to collect, analyse and share data on how many people come to the mall, how often and what they are spending their money on along with many other details, said CBRE.

    Tenants are going to be increasingly demanding about the quantity and quality of information that they get from the landlord so they can best match their products and services to the mall’s customers.

    In the current era, online retailers have to give people a reason to visit their store and not just to buy online.
    Increasing the volume of food outlets providing “retailtainment” is one way to get more foot traffic into malls, but restaurants cannot pay the same rents as luxury brand retailers.

    “Creating limited time opportunities through pop-up stores or events is another emerging trend giving people a reason to get up and go to a mall because they will not be able to get the product or have the experience elsewhere or at another time,” said CBRE Thailand’s head of advisory and transaction Jariya Thumtrongkitkul.

    “The revolution in retailing with the coming of e-commerce and competition from new supply means that landlords will have to be a lot more sophisticated in what they provide both in terms of mall format and data”.

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  • Number of Chinese buying high-end Saigon apartments skyrockets

    Number of Chinese buying high-end Saigon apartments skyrockets

    Attractive prices and returns have seen the number of Chinese customers buying high-end apartments in HCMC soar this year. Duong Thuy Dung, senior director of real estate market research firm CBRE Vietnam, said at a recent forum that 31 percent of high-end apartment buyers in HCMC in the first nine months were Chinese. This figure increased from only 2 percent in 2016 and 4 percent last year.

    In the last two years, Chinese were sixth among all buyers, but this year, they have surpassed Vietnamese to rank first.

    Only 24 percent of high-end home buyers are Vietnamese, CBRE data shows.

    Stephen Wyatt, country head of property service firm JLL Vietnam, said the number of Chinese buyers has been increasing because Vietnam has an attractive price compared to other markets like Hong Kong, Japan, Singapore, South Korea and Taiwan.

    Chinese people often compare prices in Vietnam with Shanghai when they buy properties, he said, adding that they hope to gain profit from higher property prices in Vietnam in the future.

    A high-end apartment in the city costs around $5,000 per square meter, but the same one in Hong Kong could cost four times, said Nguyen Khanh Duy, director of residential sales at real estate service provider Savills HCMC.

    Nguyen Hoang, director of research and development at real estate firm DKRA, said that the number of Chinese and South Korean buyers in HCMC started to increase last year.

    Chinese from Shanghai and Hong Kong are buying properties as investments (not to stay in). “Most projects that foreigners bought in the last two years are under construction,” he said.

    Other industry insiders said that the high returns that HCMC high-end apartments offer is attracting many foreign buyers.

    The rate of return is 5-6.5 percent in Thao Dien ward and Thu Thiem Peninsula in District 2, while in other Asian countries, this rate is only 3.7-5.2 percent, Duy said.

    CBRE senior director Dung added that it was not just Chinese, but foreign buyers in general who are showing an increasing interest in HCMC real estate.

    Dung said that each foreigner group has a different preference for high-end apartments. Customers from mainland China, Hong Kong and Taiwan prefer large-scale projects near the downtown HCMC.

    South Koreans like to buy apartments in the southern District 7 that hosts a large community of South Koreans, while Western buyers often look for a quieter lifestyle in eastern District 2.

    Dung said HCMC is estimated to receive 40,000 new apartments in the 2018-2020 period, 60-70 percent of these in the high-end segment.

    In the last three years 35,000 luxury apartments have come into the market, CBRE said.

    This is a major increase from 2012-2014 when fewer than 10,000 units were on offer, CBRE said.

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  • Alan Liis the new president of CBRE China

    Alan Liis the new president of CBRE China

    CBRE, the worldwide commercial real estate services and investment firm, recently announced the appointment of Alan Li as President, CBRE China, effective immediately. Alan will be responsible for CBRE’s advisory services across business lines in China, including Advisory and Transaction Services, Capital Markets, Asset Services, and Valuation and Advisory Services.

    Based in Shanghai, Alan will report to Ben Duncan, President of North Asia.

    To the newly created role, Alan brings approximately 18 years of professional experience in the China commercial real estate industry.

    He joined CBRE in 2015 and since this time has served as Managing Director of Capital Markets for Greater China.

    “The future of our brand in China will increasingly rely on our ability to further localize our business and solution offering to clients.” said Duncan.

    Alan is a member of Royal Institution of Chartered Surveyors (RICS) and a registered real estate broker. He is also a member of All-China Youth Federation and the standing committee of Shanghai Youth Federation, and Vice President of Shanghai Foreign-Invested Enterprises Youth Talent Association. He holds an MBA from Fudan University.

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  • UK fashion retailer New Look to exit China

    UK fashion retailer New Look to exit China

    Embattled UK fashion retailer New Look is to quite China, closing some 130 remaining stores. The move follows a strategic review of the China business announced back in June, when the company put the brakes on an ambitious 450-store rollout plan after opening just 148.

    New Look has appointed property specialist CBRE to find new tenants for the 130 remaining stores in the country.

    In March, South African-owned New Look signed a Company Voluntary Arrangement with its creditors and landlords in the UK allowing 60 stores there to be closed. Chairman Alistair McGeorge at the time cast doubt on the future of the China plans announced by former CEO Anders Kristiansen.

    New Look’s China exit comes two months after rival chain Topshop terminated a franchise agreement with local partner Shangpin “by mutual agreement”.

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  • Orchard Road retail vacancy rate free jump

    Orchard Road retail vacancy rate free jump

    The Orchard Road retail vacancy rate has dropped to 5.6 per cent in the second quarter.

    According to a report by CBRE, the rate is the lowest in 14 quarters and well below 2016 figures.

    CBRE’s head of research for Southeast Asia Desmond Sim said, “On the back of an improved tourism market, coupled with limited new supply along our famous shopping belt, Orchard Road is still able to attract new tenants.”

    Noting that new-to-market brands still require and demand visible frontages with high footfall, Sim cautioned that there may be vacancies on secondary corridors and secondary floors.

    Meanwhile, senior director of research at Cushman & Wakefield, Christine Li, said, “A two-tier market is forming in the retail segment, as accessible and well-managed malls attract the bulk of pedestrian footfall.

    Retailers and landlords have to continue to reinvent themselves, invest in technology and focus on lifestyle and activity-based experiences to keep pace with the fast-changing retail landscape.”

    This year’s new openings were largely in the food and beverage and fashion categories.

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  • CBRE appoints appointed Tom Gaffney for The Greater Bay Area and Hong Kong

    CBRE appoints appointed Tom Gaffney for The Greater Bay Area and Hong Kong

    CBRE has appointed Tom Gaffney as Regional Managing Director for The Greater Bay Area and Hong Kong with immediate effect. In this newly created role, Gaffney oversees all CBRE’s business activities in the newly-formed economic hub.

    Gaffney joined CBRE in 2016 as the Managing Director for CBRE Hong Kong, Macau and Taiwan.

    The establishment of CBRE’s new business geography reflects the firm’s goals to enhance its market leadership in the fast-growing area.

    The Greater Bay Area, comprised of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing, represents the growth of a connected economic powerhouse and offers vast business opportunities.

    CBRE currently runs three corporate offices in the region: Hong Kong, Guangzhou and Shenzhen with numerous site offices across the other cities in the region.

    Ben Duncan, CEO, Greater China, CBRE, said, “Tom has been a tremendous leader who has grown our businesses across all metrics. The new role speaks to his capabilities and our firm’s commitment to deepen our roots in the Greater Bay Area. It is already the world’s the largest bay area in terms of land area and population and presents unprecedented potential for our clients and for CBRE.”

    Gaffney has more than a decade of experience in the real estate industry. Prior to joining CBRE, Gaffney was at JLL as Head of Retail, Hong Kong and China. Before JLL, he worked for Hongkong Land in Commercial and Retail Asset Management in Hong Kong, Singapore and Thailand.

    Tom Gaffney, Regional Managing Director, The Greater Bay Area & Hong Kong, CBRE, said, “I am honoured to have been given this responsibility to drive the firm’s growth in the Greater Bay Area. These are exciting times for the region and the firm, and we are confident that our team will effectively leverage on the opportunities opened to us from the Southern China economic powerhouse.”

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