Located in the heart of the Pudong, the Shanghai International Finance Centre (called the Shanghai IFC) opened before the start of the 2010 World Expo, featuring more than 100 international luxury brands.
According to Maureen Fung, General Manager (Leasing) for Sun Hung Kai Properties (SHK), the mall''s first phase covers a gross floor area of 100,000 sqm. There are more than 180 top international brand stores and world famous restaurants.
The ground floor alone is lined with 25 flagship stores representing international brands like Louis Vuitton, Chanel, Hermes, Gucci, Prada, Cartier, Ermenegildo Zegna, Salvatore Ferragamo, Giorgio Armani, Tiffany, Dunhill, Burberry and Dolce & Gabbana.
Of these top brands, 15% are new to the Chinese market and around 40% are new to Shanghai.
According to industry experts, the Shanghai IFC Mall has attracted the largest number of flagship stores of international top line brands among Mainland malls.
Ted Tang, SHK Development''s Regional General Manager for Eastern China, pointed out that other malls in the region, such as Super Brand Mall and No. 1 Yaohan, are positioned for mostly mid- to up-market merchandise.
The IFC has positioned itself as a high-end business to offer world class merchandise.
Besides the Lujiazui area in Pudong, shop space in downtown commercial districts such as Huaihai Road, Nanjing Road, the Bund and Yuyuan are also hotly contested.
There is fierce competition among luxury brands for space in new malls like Hong Kong Plaza and Lippo Plaza. Louis Vuitton, Ermenegildo Zegna, Tiffany, Cartier and Chaumet have each opened outlets there. More are expected in the coming months.
High-end retail rentals soar
In the second quarter, the plentiful supply of newly completed high-end retail space in the core commercial districts was perfect timing for the entry of world-renowned luxury brand products into the Shanghai market.
Situated in Luwan''s Dapuqiao district, the SML Center is atop the Metro Line 9 station. Some 148,000 sqm of retail space came on stream in the second quarter.
Along similar timelines, other developments such as Plaza 889 in the Caojiadu commercial district and Imago Mall on Wuning Road have opened for business. Together they bring in a total of 86,000 sqm of business space.
Owners of premium shopping space benefit the most. Data from Jones Lang LaSalle Shanghai reveals a further drop in high-end retail vacancy rate to 0.8% in the city in the second quarter, while rentals continue to rise.
The average rental of ground level shop space stands at Rmb49.5 per sqm per day.
Shaun Brodie, Head of DTZ East China Research, said that the five major commercial districts, namely Lujiazui, Nanjing East Road, Huaihai Middle Road, Nanjing West Road and Xujiahui, have all seen rentals increase in the second quarter.
Among these, high-end shop rentals in Lujiazui average Rmb38.1 per sqm per day, a quarter-on-quarter increase of 7.4%.
As for Huaihai Road commercial district, an adjustment of brands has caused average shop rentals to increase to Rmb43.9 per sqm per day, or a growth of 3.05%.
Nanjing East Road tops the rest with the highest average shop rental at Rmb53.2 per sqm per day.
Aiming high
The influx of luxury brands is but one of the many great strides Shanghai has made towards high-end development. Six more business projects are due to come on stream in the third quarter, including a project from Henderson as well as one from Agile Property.
Those two projects are expected to add a further 67,011 sqm of retail space to Nanjing East Road. Sources say that both developers are currently negotiating with luxury brands to take up space.
As Managing Director Lina Wong of Colliers International for East & Southwest China pointed out, the 2010 World Expo has held up certain project bidding.
Nevertheless, over 200,000 sqm of retail space is expected to come onto the market in the second half of the year, with more retailers aiming to cluster around the major commercial districts.
Wong said further rental increases are expected in the major commercial districts, given that many of them have undergone renovation and upgrade lately. The overall rate of rental increase is due at 5%, with a year-on-year increase of over 10% in the major commercial districts.
Bryn Davies, Head of Asia Client Development in Europe at CBRE, remarked that while China''s size of population and rising wealth are difficult to ignore, it is the growth and performance of international brands already trading in China that is attracting the attention of those with limited or no store presence currently.
Danny Ma, Senior Director at CBRE Research China, added that growing confidence in the China retail market among international brands is evident in the number of retailers entering the country for the first time.
The growth in store numbers from those that already have a presence shows there is confidence in large format stores.
According to Maureen Fung, General Manager (Leasing) for Sun Hung Kai Properties (SHK), the mall''s first phase covers a gross floor area of 100,000 sqm. There are more than 180 top international brand stores and world famous restaurants.
The ground floor alone is lined with 25 flagship stores representing international brands like Louis Vuitton, Chanel, Hermes, Gucci, Prada, Cartier, Ermenegildo Zegna, Salvatore Ferragamo, Giorgio Armani, Tiffany, Dunhill, Burberry and Dolce & Gabbana.
Of these top brands, 15% are new to the Chinese market and around 40% are new to Shanghai.
According to industry experts, the Shanghai IFC Mall has attracted the largest number of flagship stores of international top line brands among Mainland malls.
Ted Tang, SHK Development''s Regional General Manager for Eastern China, pointed out that other malls in the region, such as Super Brand Mall and No. 1 Yaohan, are positioned for mostly mid- to up-market merchandise.
The IFC has positioned itself as a high-end business to offer world class merchandise.
Besides the Lujiazui area in Pudong, shop space in downtown commercial districts such as Huaihai Road, Nanjing Road, the Bund and Yuyuan are also hotly contested.
There is fierce competition among luxury brands for space in new malls like Hong Kong Plaza and Lippo Plaza. Louis Vuitton, Ermenegildo Zegna, Tiffany, Cartier and Chaumet have each opened outlets there. More are expected in the coming months.
High-end retail rentals soar
In the second quarter, the plentiful supply of newly completed high-end retail space in the core commercial districts was perfect timing for the entry of world-renowned luxury brand products into the Shanghai market.
Situated in Luwan''s Dapuqiao district, the SML Center is atop the Metro Line 9 station. Some 148,000 sqm of retail space came on stream in the second quarter.
Along similar timelines, other developments such as Plaza 889 in the Caojiadu commercial district and Imago Mall on Wuning Road have opened for business. Together they bring in a total of 86,000 sqm of business space.
Owners of premium shopping space benefit the most. Data from Jones Lang LaSalle Shanghai reveals a further drop in high-end retail vacancy rate to 0.8% in the city in the second quarter, while rentals continue to rise.
The average rental of ground level shop space stands at Rmb49.5 per sqm per day.
Shaun Brodie, Head of DTZ East China Research, said that the five major commercial districts, namely Lujiazui, Nanjing East Road, Huaihai Middle Road, Nanjing West Road and Xujiahui, have all seen rentals increase in the second quarter.
Among these, high-end shop rentals in Lujiazui average Rmb38.1 per sqm per day, a quarter-on-quarter increase of 7.4%.
As for Huaihai Road commercial district, an adjustment of brands has caused average shop rentals to increase to Rmb43.9 per sqm per day, or a growth of 3.05%.
Nanjing East Road tops the rest with the highest average shop rental at Rmb53.2 per sqm per day.
Aiming high
The influx of luxury brands is but one of the many great strides Shanghai has made towards high-end development. Six more business projects are due to come on stream in the third quarter, including a project from Henderson as well as one from Agile Property.
Those two projects are expected to add a further 67,011 sqm of retail space to Nanjing East Road. Sources say that both developers are currently negotiating with luxury brands to take up space.
As Managing Director Lina Wong of Colliers International for East & Southwest China pointed out, the 2010 World Expo has held up certain project bidding.
Nevertheless, over 200,000 sqm of retail space is expected to come onto the market in the second half of the year, with more retailers aiming to cluster around the major commercial districts.
Wong said further rental increases are expected in the major commercial districts, given that many of them have undergone renovation and upgrade lately. The overall rate of rental increase is due at 5%, with a year-on-year increase of over 10% in the major commercial districts.
Bryn Davies, Head of Asia Client Development in Europe at CBRE, remarked that while China''s size of population and rising wealth are difficult to ignore, it is the growth and performance of international brands already trading in China that is attracting the attention of those with limited or no store presence currently.
Danny Ma, Senior Director at CBRE Research China, added that growing confidence in the China retail market among international brands is evident in the number of retailers entering the country for the first time.
The growth in store numbers from those that already have a presence shows there is confidence in large format stores.
