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Tag: Savills

  • Schroders Seeks $220 Million for Wisteria Mall in Singapore

    Schroders Seeks $220 Million for Wisteria Mall in Singapore

    Schroders is seeking around $220 million for Wisteria Mall in northern Singapore, appointing Knight Frank and Savills to run an expression of interest closing in late November 2026.

    The two-storey suburban retail asset in Yishun currently operates at 93 per cent occupancy.

    London-based Schroders, acquired by Nuveen in October 2026, purchased the property in 2022 for $208 million through its Pamfleet Real Estate Fund III. Commercial brokers Knight Frank and Savills are managing the private bidding process.

    “We regularly review our real estate portfolios and consider opportunities in the best interests of our investors,” said a spokesperson for Schroders Capital, the firm’s private markets investment arm. Savills declined to comment, while Knight Frank did not immediately respond to inquiries.

    Divestment push in suburban retail

    The attempted disposal targets an exit yield supported by stable everyday neighbourhood footfall. Suburban retail in Singapore has demonstrated resilient trade post-pandemic, supported by grocery anchors and basic services, yet capital upside remains tightly bounded by modest rent revision caps in residential heartlands.

    For incoming buyers, underwriting the asset at $220 million leaves narrow margins against rising debt financing costs. Achieving a higher valuation than the 2022 entry price requires an incoming operator to extract better specialty tenant performance across its two levels without disrupting the core neighborhood traffic that sustains the current 93 per cent occupancy rate.

    Portfolio rebalancing across asset classes

    The Yishun offering adds to an existing divestment pipeline for the manager in Singapore. Schroders previously initiated a sale process via Jones Lang LaSalle in 2024 to offload a hospitality asset co-owned with TPG Angelo Gordon for $320 million, though that property has yet to change hands.

    Institutional real estate funds reaching end-of-life cycles are resetting their price expectations to return capital. Total commercial property transactions across the city-state reached approximately US$20 billion (S$25.7 billion) across the first three quarters of 2026, more than triple the volume recorded in the corresponding period a year earlier, according to MSCI data.

    The Pamfleet acquisition track record

    Schroders initially acquired Wisteria Mall in 2022 to capture value-add opportunities within essential suburban commercial hubs. Pamfleet Real Estate Fund III absorbed the retail podium as part of a mandate targeting defensive, income-generating neighborhood real estate.

    Bidding for the asset through the expression of interest exercise concludes in late November 2026, determining whether institutional pricing meets the vendor’s $220 million hurdle.

  • Singapore Ranks 6Th Globally in Savills Next-Gen Wealth Index

    Singapore Ranks 6Th Globally in Savills Next-Gen Wealth Index

    Singapore took sixth place globally and first across Asia-Pacific on Savills’ Next Generation Wealth Hubs Index released last Thursday, beating seventh-placed Hong Kong for young high-net-worth individuals.

    The benchmark tracks capital destinations for individuals under 40 with a net worth of at least US$5 million as an estimated US$84 trillion transfers between generations over the next 20 years.

    Savills evaluated more than 100 destinations across four core pillars: business, governance and connectivity; wealth clusters and local environment; wealth management and taxation; and lifestyle. Singapore gained ground through its concentration of private capital, tech networks and family office structures.

    “Singapore’s combination of regional connectivity, established financial infrastructure and access to opportunities across Asia gives it an important role in these capital flows,” says Rayson Yeong, Savills Singapore’s head of private wealth, investment sales and capital markets.

    The Global Benchmark and Asian Standings

    United States cities dominated the upper tiers of the global ranking. New York took the top spot, followed by Miami, London, San Francisco and Los Angeles before Singapore broke into the sixth position.

    Hong Kong placed immediately behind Singapore at seventh. The city continues to attract mainland Chinese capital through its low-tax environment, family office ecosystem and direct access to cross-border financial channels.

    Other Asian commercial centers secured positions in the global top 30. Tokyo ranked 12th, Shanghai took 18th, Bangkok placed 25th, and Kuala Lumpur claimed 29th position.

    Shifting Priorities Among Under-40 Millionaires

    Younger wealth holders are reallocating capital based on different criteria than previous generations. Inheritors and tech founders below 40 prioritize education, wellness, lifestyle amenities and personal values alongside pure capital preservation.

    This shift alters demand for luxury real estate and commercial investments. Established wealth management hubs must now offer cultural infrastructure and urban livability to retain international capital.

    Singapore and Hong Kong serve primarily as structuring centers. Both territories handle private banking, cross-border investment platforms and corporate holding entities for assets distributed across Southeast Asia and mainland China.

    Emerging Hubs and Manufacturing Wealth Creation

    Wealth creation across the wider region is moving outward from traditional financial centers. Industrial growth in Vietnam and India is producing a new pool of entrepreneurs across technology, manufacturing, financial services and real estate development.

    Secondary destinations across Southeast Asia are capturing lifestyle and residential demand. Phuket, Bali, Hoi An and Ho Chi Minh City recorded growing interest from mobile high-net-worth residents.

    Rising consumer spending in urban centers like Bangkok and Ho Chi Minh City is pulling luxury retail operators and commercial landlords into faster expansion plans. Upgraded transport links and modern residential developments continue to back that inflow.

    Capital Structuring Against Global Competition

    Competition between Singapore and Hong Kong centers on family office registrations and fund management incentives. Both jurisdictions offer tax exemptions and residency pathways tailored to high-net-worth families.

    Western hubs like Miami and London maintain strong pull through deep capital markets and established lifestyle assets. Asian hubs rely instead on proximity to fast-growing regional supply chains and regional wealth creation.

    Private banks and property developers are tracking how the US$84 trillion intergenerational wealth transfer spreads across Asia over the coming decade.

  • Bangkok Luxury Home Prices Surge 75% over Past Decade

    Bangkok Luxury Home Prices Surge 75% over Past Decade

    Bangkok luxury home prices climbed 75 percent over the past decade. That outpaced value gains across premier residential markets including Singapore, Hong Kong and Los Angeles.

    Data compiled by Savills Research shows the Thai capital delivered faster ten-year capital appreciation than gateway cities like Sydney, Paris, Berlin and Miami.

    Prime residential prices in Bangkok average roughly $12,000 per square metre, or 404,000 baht. That sits far below Singapore at $25,400 per square metre and Hong Kong at $51,300 per square metre. Tokyo averages approximately 1.13 million baht per square metre, while Seoul stands near 703,000 baht.

    Valuation Gaps Across Asian Gateways

    This pricing spread keeps Bangkok accessible for regional capital seeking prime assets at a discount to traditional financial centres. A high-end condominium in Bangkok trades at less than half the square-metre rate of comparable real estate in Singapore. That gives private wealth desks room to pitch value plays to overseas buyers.

    Yield profiles also support the market. Bangkok luxury properties generate an average gross rental yield of 3.8 percent, ranking second across the Asia-Pacific region. This gives institutional landlords an income cushion that higher-priced gateway cities cannot match.

    Mid-Year Correction Tests Developer Pricing

    Market momentum hit resistance during the first half of 2026. Luxury residential sale prices and rents in Bangkok both dropped by more than 5 percent during the six-month period, according to Savills data.

    The pullback followed price adjustments across several large development completions, alongside softer purchasing demand from domestic buyers facing broader economic headwinds. Developers that loaded pipelines with ultra-luxury units now face prolonged inventory absorption cycles. That is forcing selective discounting in core central business district locations.

    Foreign Wealth and Tourism Inflows

    Recent softening follows an aggressive run for prime rental stock. Luxury residential rents in Bangkok jumped 15.4 percent in 2024. That surge was driven by incoming foreign high-net-worth individuals, expatriate relocations and a full-scale rebound in Thailand’s hospitality and tourism industry.

    Cross-border demand has kept occupancy steady in branded residences and prime riverfront projects. That shielded institutional landlords from the steeper occupancy drops seen in mass-market suburban condominium blocks.

    Inventory Pipeline and Absorption Targets

    Asset managers are now tracking second-half 2026 sales transaction figures to assess whether the 5 percent price slip represents a temporary correction or a broader structural reset. The key test arrives as major mixed-use developments along Rama IV and the Chao Phraya riverfront deliver their final residential phases through early 2027.

  • Southeast Asian Buyers Lead Hong Kong Commercial Property Inflows with HK$3.37 Billion

    Southeast Asian Buyers Lead Hong Kong Commercial Property Inflows with HK$3.37 Billion

    Southeast Asian investors spent HK$3.37 billion on Hong Kong commercial property this year, overtaking mainland Chinese buyers as the city’s largest source of non-local capital.

    The capital injection represents over 11 per cent of the HK$30.36 billion recorded across commercial transactions above HK$50 million so far in 2026, according to transaction data compiled by Savills. Local Hong Kong capital generated HK$25.25 billion, or 83.2 per cent of the total, while mainland Chinese buyers accounted for HK$1.75 billion, representing 5.8 per cent.

    Singaporean groups drove the bulk of the cross-border activity across three distinct profiles: corporate occupiers, private family capital, and specialized accommodation operators. DBS Bank Hong Kong completed the largest corporate transaction, paying HK$2.62 billion for 152,000 square feet across several floors at The Center. In Tai Kok Tsui, Wee Hur Holdings acquired One Bedford Place, an office property measuring 184,041 square feet, for HK$748.8 million.

    Repurposing Commercial Assets for Living Sectors

    Operator capital is targeting conversion opportunities rather than traditional office leasing. Centurion Holdings provisionally agreed to purchase Yan Wo Building in North Point for HK$364 million under a deal registered on August 25. Outside commercial zoning, private vehicle The Style Limited, backed by Singapore directors Luk Kwok Wing and Wee Teng Yuan, paid nearly HK$1.17 billion for the 30-unit luxury residential enclave Jadebeach Villa in Chung Hom Kok.

    Both Wee Hur and Centurion run purpose-built student accommodation platforms across Singapore, Australia, and the UK. Their entry into Hong Kong relies on the government’s Hostels in the City policy, which permits landlords to convert commercial properties into student housing without individual planning approval while retaining existing gross floor area.

    Displacement of Mainland and Western Funds

    This pattern marks an outright reversal of the regional capital hierarchy. Mainland Chinese and Western institutions previously dominated large-ticket transactions in the city, but their deployment has ground to a halt as balance-sheet distress and high debt costs keep them on the sidelines.

    For retailers, hospitality operators, and institutional landlords, Singaporean capital brings operational expertise in managing high-density living spaces rather than speculative office plays. The primary risk sits in execution: commercial conversions carry structural limitations, and returns hinge on sustained non-local student arrivals rather than corporate tenant expansion.

    Resetting Asset Valuations

    Last year, mainland Chinese buyers topped all non-local investors with HK$16.06 billion, or 34 per cent of the HK$47.32 billion total transaction volume. Investors from the United States and Canada deployed HK$7.58 billion, or 16 per cent, while European buyers spent HK$940 million. Southeast Asian capital ranked third in that period at HK$1.74 billion.

    “Pricing has reset far enough for buyers without legacy Hong Kong exposure to underwrite assets that local owners are having to release,” said Nicholas To, senior associate director for investment at Savills Hong Kong.

    The next metric to monitor is the conversion velocity of Yan Wo Building and One Bedford Place as developers test final yields against the government’s expanded 50 per cent quota for non-local university admissions.

  • HSBC and W. Management Secure Prime Causeway Bay Flagships as Rents Soften

    HSBC and W. Management Secure Prime Causeway Bay Flagships as Rents Soften

    HSBC has secured a five-floor flagship branch at Causeway Bay’s Capitol Centre for HK$4 million a month, taking space long dominated by international fashion retailers.

    The 3,900-square-metre lease lets the lender replace two nearby outlets with a single customer hub that exceeds the combined floor area of both prior locations.

    Renovation is now underway across the ground floor and four upper levels. The space previously housed apparel brands including Victoria’s Secret, Forever 21 and Chanel. Land Registry filings confirm HSBC signed a five-year agreement for the site, making it the first long-term non-fashion occupant at the property since 2008, when casualwear chain Giordano paid HK$5.06 million monthly for the basement and five upper floors.

    Shifting from Apparel to Wealth Hubs

    A few streets away on Paterson Street, fast-fashion retailer W. Management took three floors spanning roughly 2,790 square metres in Fashion Walk. The company agreed to pay more than HK$2 million monthly for space vacated by Swedish rival H&M, which previously paid as much as HK$10 million a month for the entire four-floor building.

    Financial institutions across Asia-Pacific are increasingly stepping onto prime retail strips that once priced out non-luxury operators. Where fashion giants previously bid up core retail corridors to unsustainable peaks, wealth managers, private banks and insurance firms now view discounted street-front flagships as essential physical hubs for customer acquisition and private client meetings.

    Prime Street Rents Level Off

    Data from Savills shows Hong Kong retail sales climbed 7.1 per cent year on year in the second quarter, while online sales rose 25.3 per cent. Street-level rents across the four core shopping districts of Central, Causeway Bay, Mong Kok and Tsim Sha Tsui held flat quarter on quarter, while mall rents slipped 1.8 per cent over the same timeframe.

    HSBC will close its Premier centre at Causeway Bay Plaza 2 on Lockhart Road and its branch at Park Lane on Gloucester Road on October 17, with the new Capitol Centre flagship scheduled to open on October 20.

  • Experiential Retail: The Resilient Future Of Physical Stores Amidst E-commerce Surge

    Experiential Retail: The Resilient Future Of Physical Stores Amidst E-commerce Surge

    Despite the rise of e-commerce, physical retail continues to retain a strong appeal among consumers. According to Savills latest survey of its global expert network on occupier outlooks, physical retail is proving resilient with responses leaning 65% towards anticipating rental growth, 26% forecasting stable rents, and 9% anticipating declines; a clear shift from previous years. In 2024, only half of the experts polled projected rising rents, and one in five expected rental decreases.

    Sarah Brooks, Associate Director, Savills World Research, stated that across Asia Pacific, India, Malaysia and Viet Nam are expected to see robust retail rent rises and improved take-up. These markets benefit from rapidly increasing consumer affluence, growing tourism and an influx of international brands. In addition, the supply of high-quality retail space has not kept pace with demand, pushing vacancy rates down and driving competition.

    Experiential retail as a key growth driver

    According to Matthew Powell, Director of Savills Ha Noi, Viet Nam has a distinctive traditional market culture, where grocery stores and physical retail spaces are essential in daily life. Retail spaces are not just transactional; they also provide connection and community building. As such, retail stores will continue to maintain a significant presence in the market.

    In this context, experiential retail has become a key strategy for shopping centres seeking to remain competitive. By shifting the focus from purchasing to experience-led environments that are engaging, such as interactive stores, pop-ups, workshops, and curated F&B concepts, it creates compelling reasons for visitors to stay longer, return more often, and ultimately drive footfall beyond products alone.

    The importance of this shift has increased as online channels continue to change consumer behaviour. Physical retail can no longer rely solely on product offerings, especially in Viet Nam, as Gen Z and Millennials account for 60–70% of urban mall traffic and care more about discovery, interaction and social engagement.
    According to research conducted by Censuswide, 62% of Gen Z consumers and 68% of Millennials believe that luxury is defined not only by the product but also by the experience. This shift in consumer expectations is reshaping how shopping centres operate and select tenants, with operators moving beyond occupancy-led strategies to curate tenant mixes that enhance the overall customer experience.

    Tenant selection is therefore no longer based only on brand names or rental levels, but also on a brand’s ability to encourage interaction, create immersive experiences, and match lifestyle expectations.

    Looking ahead, the future of physical retail is experiential. In markets such as Viet Nam, where consumption, tourism, and lifestyle spending continue to grow, shopping centres that embrace experiential retail will not only remain relevant but strengthen their role as community and commercial hubs, supporting long-term value for occupiers and investors alike.

  • Housing liquidity in 2022 lowest in 5 years

    Housing liquidity in 2022 lowest in 5 years

    The number of house and apartment transactions in the north and the south in 2022 fell to the lowest level in 5 years, according to report by real estate agencies.

    The report said that the apartment market in Ho Chi Minh City and in some southern provinces has been on the decline throughout the year.

    In the first two quarters, nearly 14,000 new apartments were put up for sale, and some 75% were sold. In the third quarter, 1,250 apartments went on the market, and the absorption rate dropped to about 52%.

    In the fourth quarter, 100 new apartments were sold, the lowest number for the year. Furthermore, the number of units sold during the peak sales season at the end of this year was far below the expectations of investors.

    According to Batdongsan, this is an unprecedented situation in the pre-Tet period over the past 5 years. The period before Tet (Lunar New Year holidays)is the peak time for yearly real estate transactions. Many businesses have already increased discount rates to 40-50%, but the liquidity has not shown any improvement. Tet falls in late January 2023.

    According to a market report by real estate services provider DKRA Vietnam, the apartment market showed that 1,385 units were sold in HCMC in the first quarter of this year, down 68% compared to the previous quarter. The liquidity improved in the second quarter, but weakened in the third quarter.

    In August, in the primary market, only 177 apartments in the city were sold, the lowest number in three years, and down 4.6 times against July. The absorption rate in December was around 20%, the lowest in three years.

    Over 200 apartments were sold in November in HCMC and southern provinces, dropping nearly 90% against the same period last year.

    In the south, just four houses were sold in August, down 23 times against July, and down over 70 times compared to April.

    In the secondary market in the south, many apartment and house investors have offered high discount rates to cut their losses, but liquidity has remained low in the second half of this year, according to VnExpress’ observation. The housing market remained quiet in December.

    In the north, housing liquidity has also decreased sharply this year.

    According to Savills Vietnam, in Hanoi, some 4,000 apartments were sold in the first quarter, while sales dropped 45% in the second quarter against the previous one, and decreased 10% in the third quarter.

    In the third quarter, 299 semi-detached houses and villas in Hanoi were sold, down from 666 units in the first quarter.

    Nguyen Van Dinh, president of the Vietnam Association of Realtors, said since the second quarter, the real estate market in the north has decelerated due to the impact of the credit tightening policy.

    The market’s absorption rate in the third quarter decreased 66.5% against the first half of the year, and the number of transactions dropped over 50% against the same period last year.

    The cash flow has slowed down in the real estate market, causing a marked decrease in liquidity, Dinh said.

    Batdongsan’s southern regional manager Dinh Minh Tuan explained that transactions were frozen because some investors and buyers had difficulty accessing bank loans, while others were shocked at increasing interest rates. This situation has caused people to delay purchases in the short term while they assess the market.

    Many well-off people are hesitant to disburse money, expecting housing prices to fall further and discount rates to increase in the coming time, Tuan said.

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  • Hong Kong retail rents tipped to turn

    Hong Kong retail rents tipped to turn

    Hong Kong retail rents are tipped for a modest rise of up to 5 per cent this year according to a research report from real estate advisor Savills. But the authors, Nick Bradstreet, MD, head of leasing and Simon Smith, senior director, research & consultancy, noted that this year has already got off to a positive start. “Landlords and retailers are wary given current uncertainties surrounding trade, stock market valuations, a weak renminbi and rising interest rates among other factors,” said Bradstreet. “But early indications are that the year has got off to a positive start.”

    Smith added: “The well-observed shift towards higher same day mainland visitor numbers and lower per capita spending continued last year and we believe that this year can expect more of the same.”

    Both prime street-shop and shopping-centre rents remained flat last year and rental growth had all but ground to a halt by the fourth quarter due to a weak sales performance, the report said.

    However, the new cross-border bridge and rail link led to a 40.3 per cent year-on-year rise in same-day mainland visitor arrivals in November to 3 million. The number of mainland tourists actually rose during the first 11 months of last year by 14 per cent.

    Smith said the increasing number of same-day visitors and a weak renminbi meant lower per-capita spending and unchanged retail rents by year end.

    “Retail sales growth decelerated to only 1.4 per cent in November, the slowest growth rate registered since June 2017; yet most retailers reported a better-than expected performance over the Christmas holiday period.”

    Thanks to the strong tourist demand, cosmetics and personal care products retailers are expanding rapidly in popular tourist districts such as Causeway Bay, Tsim Sha Tsui and Mong Kok. Food and beverage stores benefited, too, the report said.

    On the contrary, the fourth quarter saw zero rental growth over the previous quarter in prime street shops in most districts, except Tsim Sha Tsui (down -0.9 per cent quarter on quarter). Whilst shopping malls in Kowloon were largely responsible for the marginal decrease with a negative 0.3 per cent change over the third quarter, mall rents remained unchanged on Hong Kong Island and in the New Territories.

    “As a total of 2.3 million sqft of new supply will come on stream this year – the highest level since 2006 – the market fundamentals are expected to remain relatively stable.

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  • Central Premium Mall Vietnam plans to open next year

    Central Premium Mall Vietnam plans to open next year

    Ho Chi Minh City is getting a new shopping centre, Central Premium Mall, in District 8, next year. Set to open in the third quarter of next year, the six-storey mall spans 40,000sqm, and is expected to welcome more than 3 million visitors annually.

    The first and second levels will host 200 kiosks from fashion retailers, a supermarket and luxury cafes.

    The third level is for dining, with more than 30 restaurants, including China’s Melie Dimsum, America’s HolyCow, Korean BBQ Gangnam, together with sushi and buffet restaurants.

     

    The fourth and fifth floors are for entertainment with a children’s playground Kid World, spas, Mexican-style Ritacita Bar, Beer Club Vuvuzela, Bar Redbull and Bar Rocco, among others.

    A cinema will occupy the whole 4000sqm sixth floor.

    Project owner Quoc Cuong Gia Lai says the shopping centre will be managed by a reputable international company, whose identity has yet to be revealed.

    The mall has cost VND1 trillion (US$43 million) to build.

    Central Premium Mall occupies the lower levels of the Central Premium apartment complex currently under construction. A roof-topping ceremony was held recently and apartments are expected to be handed over to residents by the third quarter of next year. It will be managed by Savills Vietnam.

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  • H&M Vietnam big expansion in birthday celebration

    H&M Vietnam big expansion in birthday celebration

    H&M Vietnam has opened two new stores, in Ho Chi Minh City and Hanoi.

    The HCMC store is located inside District 7’s Crescent Mall, managed by Savills Vietnam, while the Hanoi store is situated in Vincom Nguyen Chi Thanh.

    Crescent Mall, comprising 45,000sqm of retail space, is one of the city’s earliest international-grade shopping centres and has been trading for about eight years. An extension adding 11,200sqm of retail space, is currently under construction and expected to open late next year, beneath a 25-storey office tower.

    “Crescent Mall is fortunate to be in an area where expansion is still possible,” said Tu Thi Hong An, associate director of commercial leasing at Savills HCMC. “When compared to other areas in Ho Chi Minh, District 7 has been planned and well zoned by Phu My Hung. We hope that H&M will be very happy in this new location.”

    According to Savills, retail turnover in Vietnam last year was US$129 billion, increasing 11 per cent year on year. From now until 2021, the retail market is forecast to grow steadily with the increased demand of leisure (10 per cent per annum), modern grocery (9 per cent) and apparel (6 per cent).

    After entering Vietnam in September last year, H&M Vietnam now has six stores in both Hanoi and HCMC while its rival Zara’s taking time with two outlets, one each in HCMC and Hanoi.

    Another fast-fashion brand, Uniqlo, is planning to expand into Vietnam next year.

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  • Hai Di Lao will open first London store

    Hai Di Lao will open first London store

    Chinese hot pot chain Hai Di Lao will open its first UK restaurant at the Trocadero in Piccadilly Circus, London.

    In a deal facilitated by real estate firm Savills, the brand has signed a 15-year lease of an almost 10,000sqft site. It is the chain’s first venue in Europe and follows the opening of its New York restaurant in Times Square.

    Savills’ leisure team associate director Richard Thomas said “Hai Di Lao is a globally recognised brand with fans of the concept worldwide… the chain already has its sights set on expansion both in the UK and across Europe and we are very pleased to have secured this prime spot for its flagship restaurant.”

    To date, Hai Di Lao has opened 310 locations around the world.

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  • Hong Kong retail rents prepare to move into ‘early upswing’

    Hong Kong retail rents prepare to move into ‘early upswing’

    Hong Kong retail rents are expected to move into an “early upswing cycle” this year according to a regional real estate market briefing prepared by Savills.

    The report details commercial and residential property leasing trends across major Asian markets and as the accompanying tables show, compares occupancy costs of space as well.

    It groups major cities by upswing and downswing, late and early, showing that Hong Kong is at the end of its downswing in retail rental rates. Cities currently in early upswing are Manila, Guangzhou, Jakarta and Singapore. Hong Kong is grouped with Taipei, Hanoi, Ho Chi Minh City and Seoul, suggesting all those markets are about to turn.

    Savills says regional prime retail rents moved by between a decline of 1.8 per cent in Beijing and an increase of 5.9 per cent in Guangzhou last year.

    “Strong local retail consumption growth of 9.5 per cent year on year in the second half of the year following 10.5 per cent in the first half of the year supported the Guangzhou leasing market, while prime shopping malls began to re-position and upgrade, focusing more on entertainment and food & beverage,” said Savills in a brief commentary.

    “Again, Hong Kong’s prime shopping mall rents are considerably ahead of all other Asia-Pacific markets and are expected to move into an ‘early upswing’ cycle this year.”

    Savills says economic growth across Asia-Pacific continued to picked-up moderately in the second half of last year and the International Monetary Fund estimates that the “Emerging and Developing Asia” economies grew by 6.5 per cent over the year as a whole while China grew by 6.8 per cent and Japan’s economy grew by 1.8 per cent last year, from 0.9 per cent in 2016.

    “The improving global economic outlook and an accommodative monetary policy created momentum for business expansion,” said Savills.

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  • Hong Kong shopping centre rents predicted to rise

    Hong Kong shopping centre rents predicted to rise

    Hong Kong retail rents are expected to inch up in 2018 according to projections by Savills.

    In a media briefing on Tuesday, Savills senior director of research and consultancy, Simon Smith, predicted a rise in prime retail shop rents of up to 3 per cent, following a decline of 2 per cent this year.

    “The domestic economy is supporting demand as unemployment is low and consumer confidence is high as incomes grow and house prices hit new records,” Smith said.

    “Retail sales are beginning to show signs of life while mainland demand is also returning after two to three years of downward adjustment.”

    At the end of last year, Smith forecast a prime street retail rent decline of between 5 per cent and 10 per cent, but despite some high-profile rent renegotiations, they held up.

    Smith’s data is based on ‘spot’ rents which are different to the headline-grabbing rent reductions achieved by some retail groups in Central and Causeway Bay during this year.

    “When you read about a 50 per cent rent cut, that is usually the renewal of a three-year lease. My rents are ‘spot’ rents and the 2 per cent is this year alone.”

    However, Smith expects shopping mall rents to slip over the next year, giving the narrowing gap with strip-shops. After a decline of just 1 per cent this year, he is tipping a fall of up to 5 per cent next year.

    In terms of sales of retail real estate, Smith predicts an increase in prices of up to 5 per cent next year following a decline of 4 per cent this year, which was well below the 5 to 10 per cent he expected in late 2016.

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  • Hong Kong retail start recovering

    Hong Kong retail start recovering

    A “steady if cautious” Hong Kong retail recovery is clearly underway, according to a report from Savills released today.

    “The retail sector is slowly coming to life after four years of painful adjustment which has seen the emergence of a ‘tenant’s market’, a rare occurrence in Hong Kong’s landlord-dominated retail scene,” observed Simon Smith, head of research and consultancy with Savills.

    Over recent months, he said, retailers have been taking the opportunity to upgrade for little or no extra cost and examples include Pandora which moved within IFC Mall and Hourglass, which runs Patek Philippe, relocating within Tsim Sha Tsui from the Imperial Hotel to a better site in the Holiday Inn.

    In further evidence of upgrade demand, Harry Winston has taken the space previously occupied by Ferragamo in the Mandarin Hotel and will open in early 2018. Alternatively, retailers are cutting overheads as they find that renewal negotiations are yielding significant savings as landlords discover a new pragmatism.As reported, Topshop has renewed the lease on its Queen’s Road Central store at a discount of about 50 per cent.

    While landlords of high street shops remain on the back foot, larger shopping centres, such as  Harbour City, IFC Mall and New Town Plaza, are proving relatively immune to the downtown, says Smith.

    In IFC Mall, Italian menswear brand Boggi opened recently while Brunello Cucinelli has launched a new flagship in the same mall.

    “As street-shop rents have fallen heavily while centre rents have only seen a minor adjustment, the gap between the two has narrowed considerably and tenants are now finding that a prime street front pitch can be a viable alternative to taking space in a nearby mall. This is the narrowest the gap has been since 2009 and represents a return to the norm after seven years of major gains in street shop rents.”

    Strength in regions

    Savills also notes that regional and district malls such as Popcorn in Tseung Kwan O and Tuen Mun Town Plaza are doing relatively well.

    “Hong Kong’s tight geography, excellent transport infrastructure and dense retail environment has helped this type of mall defend against the threat from online. The appeal of air conditioned spaces in the summer months and the lure of enhanced F&B offerings have also helped boost the appeal of local malls. We have also seen landlords putting more effort into marketing campaigns with better events, more pop-up stores and creative TV and online advertising,” said Smith.

    “Most malls now have a very well-established cyber-presence via websites and apps. Click-and-collect is making some limited headway locally, with brands such as Zara, Burberry, L’Occitane, Watson’s Wine, Chow Sang Sang and Starbucks all offering the service.

    “In a mixed market some trade categories are performing well and pharmacies in particular are expanding aggressively at the moment. Not every landlord wants them but they are often prepared to pay above-market rents. F&B is also out-performing, driven in part by a richly valued stock market and rising wages.”

    Nick Bradstreet, head of retail with Savills, said luxury fashion is turning around in Hong Kong even though brands have been closing stores in Macau and Mainland China over the past year or so. Luxury sales in China have actually surged over the past six to nine months.

    “Cosmetics retailers are reporting fairly stable business, but after a period of rapid expansion, many brands are still culling store numbers. Electrical goods retailers are consolidating in what is a very competitive marketplace,” he said.

    Savills prime street shop rental indices remained flat over the third quarter while rents in prime malls continued to drift off marginally. The latest September retail sales figures from government recorded a seventh consecutive month of rises attributable in part to a strong inbound tourist numbers. Jewellery, watches, clocks and valuable gift sales outperformed, rising by 14.7 per cent year-on-year, with strong growth also noted for medicines, cosmetics and Chinese drugs.

  • Shoppes at MBS share set at $4.9b

    Shoppes at MBS share set at $4.9b

    Casino mogul Sheldon Adelson’s price tag of up to S$4.9 billion (US$3.5 billion) for a 49 per cent stake in Shoppes at Marina Bay Sands makes it the “most expensive mall in the world,” he says.

    However, sovereign wealth funds and private-equity giants may be willing to pay a massive premium to own a stake in such a high-profile asset, says real-estate consultancy firm Chesterton Singapore MD Donald Han.

    He says Singapore stacks up as one of Asia’s best property markets because its relatively strong dollar enables investors to preserve their capital.

    “The property has to be assessed based on yield or the operating income from the mall, and how it stacks up against market expectations…But buildings with a certain character or iconic stature that are one of a kind are also worth a premium.”

    Another selling point is that there are few quality malls on the market, and little prospect in the near term of more land being released for such large developments, says Savills Singapore research head Alan Cheong.

    Meanwhile, the proposed sale is subject to approval from the authorities, under an agreement that allowed US gaming giant and Marina Bay Sands parent Las Vegas Sands (LVS), as well as Genting Singapore, to have exclusivity in Singapore for 10 years. The agreement says LVS cannot sell any part of its 800,000 sqft (74,322 sqm) mall for that period, and then only after government approval. The 10-year duopoly, which also applies to Genting’s Resorts World Sentosa, expires next month.
    Adelson says the mall sale proceeds could be used in the firm’s next investment in Japan or South Korea.

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