Seven mega projects to debut in Beijing in 4Q

BEIJING: Seven projects with a combined gross floor area of approximately 775,000 sq metres are expected to make debuts in the Beijing retail property market in 4Q10, Colliers International said.

It added that four of these new projects, accounting for 75.75% of the total new supply in the quarter, are located in non-traditional catchment areas such as West Chang An Avenue.

"With these large size retail spaces becoming available on the market at the same time, a run-up in the overall vacancy rate in Beijing's retail property market is expected," it noted.

In the Colliers International Beijing Knowledge Reports 3Q 2010, it said concessions in headline rents should prevail, as landlords of new completed projects may find it increasingly difficult to have requisite brands commit to these new malls.

The pressure will come not only from competing new schemes, it added, but also from a diversification of retailers' store allocation strategies and constraints of store numbers of brands in the same city.

"Conventional retail catchments should, however, continue to be resilient — in particular, the Wangfujing, Xidan and Dongzhimen precincts, which are the main attractions for many shoppers to the capital — and Colliers International would expect the vacancy rates of these areas to continue to fall over the next few months," it stated.

The real estate research house expects the economic outlook in the locality to remain positive in essence, with an optimistic China's gross domestic product growth projection of 10.5% in 2010, underpinning consumer sentiment and encouraging overseas and domestic retailers to engage their business expansion in China and Beijing as well.
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