Retail sales remain strong across Asia Pacific for 1Q 2012

SINGAPORE (May 31): Retail sales continue to see significant gains across the region in the first quarter of 2012, according to Cushman & Wakefield's latest Asia Pacific Retail MarketBeat.

Consumer sentiment has improved on the back of a positive labour market, steady income growth and buoyant tourism. The region saw China, Singapore, Hong Kong and Japan all reporting strong growth whilst South Korea and Australia saw moderate growth. This has been attributed to brisk demand and major retailers' continuous expansion in Asia Pacific.

C&W executive managing director for Southeast Asia Arshpreet Chaudrey said, "Change in household income levels between 2010 and 2020 will be over 200% in India and 125% in China on a purchasing power parity basis. When you couple this phenomenon with the fact that the share of disposable income to overall household income is rising in Asia faster than anywhere else in the world, clearly retail sales will do well. Major retail centres across Asia will continue to perform well."

Chaudrey also noted that an interesting phenomenon to watch out for over the next few years is the demand for distribution centres and better supply chain models as online retailing gathers momentum across Asia.

Meanwhile, Sigrid Zialcita, C&W Asia Pacific managing director for research said Asia remains a hotbed of retail construction activity in most markets citing Tier 1 cities in China, Seoul, Jakarta, and Tokyo as leading retail construction sites. However, she added that retail investment has started on a slow note and progress is marked with caution.

Overall, Cushman & Wakefield expects the regional economy to make steady gains throughout the year and remain supportive of the retail sector. Though risks abound with the eurozone debt crisis continuing to weigh on the region, the real estate consultancy anticipates the retail market to remain stable with such positive momentum that it will be able to hold up the overall retail development in the region.