“With robust inbound tourism policies and new retail developments, Hangzhou’s retail market is poised for continued growth, though rental income prospects remain modest in the short term.”

JAMES MACDONALD, SAVILLS RESEARCH



New projects, enhanced tourism policies, and diverse consumption environments drive growth amid modest rent increases.

• Retail sales totalled RMB300 billion in the first five months of 2024, up 0.8% YoY. General retail sales and F&B were up 0.4% and 2.8% YoY, respectively.

• Four new projects were launched in Q2/2024, adding 505,000 sqm of new supply to the market, and bringing the city’s stock to 7.9 million sqm.

• Several new projects were launched with rents below the market average, nevertheless their high occupancy rates on opening days and diverse brand mix help expand consumer choices.

• The citywide vacancy rate remained flat in Q2/2024 at 9.9%, down 0.6 ppt YoY.

• First-floor rents kept flat in Q2/2024 to an average of RMB14.3 psm pday, up 0.3% YoY.

• Four projects are expected to launch in 2H/2024, bringing 248,000 sqm of new retail space to the market.