In recent years, the rapid upgrade in consumption structure has supported the emergence of consumer spending as a key driver of China’s economic growth. Consumer goods retail sales totaled over RMB 33 trillion in 2016, which is 2.9% higher than that of GDP. The effects of consumption on the economy have been considerable, with consumer spending now accounting for over 64.6% of economic growth. At the same time, a strong shift in consumer preferences has taken place, with shoppers displaying stronger demand for higher quality products and a wider selection of goods. However, I n some cities, developers have already begun to experience pressure on the leasing and operational side due to the large volume of new supply.
In view of this, commissioned by the Ministry of Commerce, CBRE and the China Chain Store & Franchise Association (CCFA) jointly released the ‘China Shopping Centre Development Index’ to serve as a guideline reference for relevant government departments and planning authorities. The index revealed:
- Overall market outperforms projections, with strong operational performance, but room for improvement in cost expenditure. This projection indicates high expectations for the upcoming interim market performance.
- Index breakdown by region and city: Eastern and Northern China continue to outperform and progress in Northeast China remains slow. Tier I cities rank top in both current status and forecasts; tier II cities are under pressure from new supply; tier III cities lack high end new projects.
- Index breakdown by property classification: Outlets performed strongly in The Index in 2016, while community malls also fared well.