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Greater China Retail Supply/Demand Trends – New concepts for a changing market

This Week

HONG KONG SAR – Media OutReach – 31 August 2023 – Cushman & Wakefield, a leading global real estate services firm, today released its annual Greater China Retail Supply/Demand Trends report. According to the report, by Q2 2023, the total prime retail property stock in the core markets in the 16 major cities in Greater China we track totalled 106.0 million sq m. Many international and domestic brands either opened their first store or accelerated their business expansion in China, demonstrating an increasing demand for retail space in the market. The total premium core city retail property net absorption across the Greater China market for the first half of the year was 2.66 million sq m. The overall vacancy rate seen in the 16 major cities in Greater China decreased to 11.01% in Q2 2023.

The supply/demand rundown for 18 city core area-level markets in Greater China (Q2 2023)

Source: Cushman & Wakefield Research
Source: Cushman & Wakefield Research

Duke Zhen, Managing Director, Head of Retail Services, China, Cushman & Wakefield, said, “Since 2023, China’s Ministry of Commerce has organised a number of ‘Consumption Boosting Year’ activities and introduced a series of measures to optimise consumption supply and boost consumer confidence. With the implementation of a package of these consumption policies, the Chinese consumer market has fully recovered. Ahead, the size of China’s retail market will continue to expand, with new retail models and technologies expected to drive greater transformation within the retail industry in China and at the same time meet the ever-changing and increasing needs of consumers in the country.”

China’s retail property market is and will continue to be a popular investment destination for investors, developers and retailers, given the measures from the central and local governments to stimulate consumption, Chinese consumers’ continual pursuit in upgrading the goods that they buy, the launch of retail property C-REITs, and the general sustainable development within the overall retail industry.

Shaun Brodie, Head of Business Development Services, East China & Greater China Research Content, Head of Greater China Occupier Research, Cushman & Wakefield said, “In Greater China, consumer demand volume still has potential to be further expanded. Looking forward to the future, a series of policies to promote consumption will be implemented to drive this expansion as well as the upgrading of China’s consumer market. Retailers and landlords of shopping centres will need to keep up with the latest market trends and constantly innovate to meet the increasingly diverse consumption needs of Chinese consumers.”

In order to cater to the changing market and increasingly diversified needs of Chinese consumers, shopping centre owners and retailers will continue to try to broaden the consumption market and innovate new business models and retail concepts. In terms of demand, the main focus trends are and will be as follows:

  • The general boosting of consumption;
  • Chinese brand expansion;
  • Auto brand demand, and;
  • Pop culture-driven development.

Looking ahead, we expect a number of factors, including a series of pro-consumption policies and individual city initiatives, to drive retail market growth.


By the end of H1 2023, the total stock in Beijing’s retail market was 16.1 million sq m, of which shopping centres recorded 14.2 million sq m.

With improving consumer sentiment, customer footfall in shopping centres in the city gradually rebounded in H1 2023. Additionally, new store openings were mainly high-end boutiques and the launches of branded first stores, especially in the high-end fashion retail sector. As of H1 2023, the average asking rental in the core submarkets dropped slightly to RMB2,250 per sq m per month, while the vacancy rate remained stable at 10%.

With the gradual recovery of the consumer market, the pace of upgrading and renewal in the Beijing retail market picked up. Around 1 million sq m of new supply is scheduled to enter the market in H2 2023. We expect that the continued enhancement of the retail environment and higher project quality will create new consumption growth points and boost the development of Beijing as an international consumption centre city in the near future.


According to the Shanghai Municipal Bureau of Statistics, the city’s consumer goods retail sales totalled RMB937.8 billion in H1 2023, increasing by 23.5% y-o-y. Strong retail market fundamentals have continued to attract interest in Shanghai’s retail market from brands, investors and developers, as reflected in the launch of five new projects during H1 2023.

By the end of Q2 2023, the overall vacancy rate in the Shanghai mid- to high-end shopping centre market fell to 9.6%, down 0.5 percentage points q-o-q. Demonstrating the strong recovery in the retail market, this is the lowest vacancy rate recorded for the city’s prime retail property market since 2022. Meanwhile, the average first floor asking rent in core areas climbed to RMB1,891.9 per sq m per month, up 0.5% q-o-q.

To capitalise on the opportunities in Shanghai’s expanding consumer market, more overseas and domestic retailers, ranging from fashion to food and beverage (F&B) brands, are planning to enter or further penetrate the retail market with ambitious business expansion plans. Thus, the overall vacancy rate is expected to fall within a reasonable range into the rest of 2023.


The opening of the Rail In project and Shenzhen MixC Phase III in H1 2023 pushed Shenzhen’s total prime retail stock to 6.4 million sq m.

Shopper footfall in shopping centres displayed a clear improvement in the first half of this year, with demand for F&B and essential goods most active. The citywide vacancy rate subsequently dropped 1.4 percentage points over the half year to 9.0% at the end of Q2. Most landlords hold an optimistic attitude to the future market and as a result, prime space rental levels remained firm at RMB809.4 per sq m per month.

Shenzhen is expected to add 1.1 million sq m of new supply through to end of 2024. Some F&B brands are seeing opportunities and expanding to benchmark projects in the emerging submarkets, albeit with a more cautious attitude. The city is aiming to further develop its consumption centre credentials via shopping promotions, attracting new brands and first stores, and expanding the events sector. Nonetheless, the full resumption of consumer demand will depend upon overall economic recovery, disposable income improvement, and the restoration of consumer confidence.


In the first half of 2023, the gradual restoration of normal production and living promoted improvement in Guangzhou’s macroeconomic environment. However, the retail property market will take some time to recover. Over the past six months, no new supply completed in Guangzhou’s prime retail market. Thus, total stock remained at 5.01 million sq m.

The increase in operating revenue has brought confidence with some brands now expanding their business. Thus, after experiencing four consecutive quarters of increase, the city’s overall vacancy rate has dropped to 7.0%. Subsequently, the rental level within the core business district has remained robust, supporting the stability of the city’s average rent in the first half of the year.

It is expected that 679,000 sq m of new supply will enter the market through the second half of 2023, making market competition more intense. Looking ahead, the improvement in consumer purchasing power and market confidence is expected to bring further support to Guangzhou’s retail property market.


In H1 2023, the entrance of Joyous Time into the market brought about 200,000 sq m of new supply, pushing the city’s total stock up to 7.98 million sq m. In 2023 Q2, Chengdu’s retail market stock ranked third in the country, trailing only Beijing and Shanghai.

Because most of the new projects are large-scale community commerce or regional projects, rental in Chengdu’s retail market continued to show a downward trend. This quarter, the city’s average rent dropped by 0.59% q-o-q to RMB611.21 per sq m per month. Meanwhile, with the easing of the pandemic, activity within Chengdu’s retail market increased. Subsequently, the city’s overall vacancy fell a further 0.68 percentage points y-o-y to 6.18% in Q2 2023.

In H2 2023, with the entrance of two high-quality retail property projects, Tianfu Joy-City and Tianfu Merchants Garden City, into the market, a new business centre in Chengdu is expected to take shape.


Since the beginning of this year, the Hangzhou government has systematically promoted the “8+4” policy system, with an all-out effort to generate an economic turnaround. Thanks to this, the city’s consumer market continued to pick up in H1 2023.

The continuously optimised business environment has prompted vitality in the market. During H1 2023, two commercial projects, with a combined 305,000 sq m of new retail space, opened in Hangzhou. Meanwhile, the existing stock of retail properties continued to create strong content drivers through the enrichment of brands, operational innovation and the enhancement of the shopping experience. These moves have helped to strengthen competitive advantages.

Acting as a significant measure to implement the strategy of expanding domestic demand, in the near future, the normalised issuance of consumer infrastructure REITs will help to revitalise the stock assets of prime retail properties in Hangzhou and promote the transformation of the industry’s operating model in the city.

Hong Kong

Over the past six months, with Hong Kong’s border reopening with the world, the number of visitors to the city has increased significantly. The retail market has gradually recovered, and various economic indicators have shown improvement. In addition, the Hong Kong government has distributed consumption vouchers to further stimulate spending in the retail market.

With this positive news, retailers have reviewed and strategised their expansion plans. Among different retail categories, those popular with mainland visitors have benefited the most from the border reopening. Over the last six months, leasing activities have been most active in the pharmacy, jewellery and watch brand sectors.

The gradual recovery of leasing activities has also led to a steady increase in rents on high streets, while the vacancy rates in various submarkets have continued to drop. Significantly, the average vacancy rate fell to about 9% in Q2 2023, which is a three-year record low.

Finally, the consumption pattern of mainland visitors has shifted towards experience-based activities rather than pure consumer-based ones, which has deterred some large brands from expanding.


Last year, as vaccination rates rose and restrictions eased, the business districts in Taipei gradually began to recover, boosting retailer confidence in the city and filling vacant units.

By Q2 2023, the vacancy rate in Ximen in particular had dropped for four consecutive quarters, reaching 11.1%. Meanwhile, due to a lack of compelling retailer attraction in the short term, the vacancy rate in Zhongxiao remained at 13.8%. In Zhongshan-Nanjing, retail business activity remained with the submarket’s vacancy rate reaching 5.3% at the end of the fist half of the year.

In the latter half of H2 2023, international tourists are expected to return. Domestic tourism, however, will continue to remain the key driver for consumption in Taipei’s retail market.

Today, in the wake of the pandemic, consumers are now prioritising quality of life, preferences, and unique experiences. The focus for commercial retail spaces in the city is now on creating unique retail environments and shopping experiences rather than just simple product display.

Please click here to download the full report

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About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in approximately 400 offices and 60 countries. In Greater China, a network of 23 offices serves local markets across the region. In 2022, the firm reported global revenue of US$10.1 billion across its core services of valuation, consulting, project & development services, capital markets, project & occupier services, industrial & logistics, retail and others. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), Environmental, Social and Governance (ESG) and more. For additional information, visit .

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