“Despite macroeconomic challenges, numerous brands are showing resilience by expanding and adapting to market changes. Key growth opportunities are emerging in niche subcategories, highlighting the resilience and potential within the sector. ”

JAMES MACDONALD, SAVILLS RESEARCH



Strong leasing activity supports vacancy stability

• Retail sales dropped 3.3% YoY in the first eight months of 2024, with wholesale & retail down 3.1% and accommodation & F&B down 4.7%

• Three new projects within the Outer Ring Road were launched in Q3/2024, adding 261,000 sq m of new supply to the market.

• The citywide vacancy rate remained stable at 11.7% in Q3/2024, down 0.6 ppts YoY. Vacancy rates in prime retail areas rose by 0.6 ppts QoQ to 10.0%, while non-prime areas saw a slight decrease of 0.1 ppts QoQ to 12.1%.

• First-floor rents declined by 0.5% in Q3/2024, averaging RMB24.6 psm pday, representing a 1.2% YoY decrease.

• Immersive interactive entertainment pavilions significantly boosted new leases in the leisure and entertainment sectors, with ongoing upgrades keeping offerings fresh and appealing.

• Several new fast fashion and streetwear brands targeting younger, personalised markets entered Shanghai, with flagship stores revitalising the fashion segment.

• Three shopping malls are set to launch in Q4/2024, adding a total of 185,000 sqm of retail space.