Returns for successful shopping centers can be very high, added Hawkey. However, less successful centers have poor returns and, as the shopping center market in many cities is now intensely competitive, some will fail.

In the next few years, a lot of retail supply is scheduled to come into the market, according to James Macdonald, head of Savills Research China.

Beijing and Shanghai may see their retail stock increase by 14 percent and 30 percent from the end of 2012 to the end of 2014, while Chengdu in Sichuan province, Shenyang in Liaoning province and Chongqing are expected to expand their retail stockpiles by 88 percent, 50 percent and 53 percent respectively during the same period, said Macdonald.

Inexperienced retail developers are a worse problem than oversupply, said Annie Lei, national director of retail services at Cushman & Wakefield China. Lack of experience leads to a vicious circle, with poor planning and positioning, leading to problems with design and brand mixture and, ultimately, problems with long-term operations," she added.

Chen Zhongwei, head of research at CBRE China, said his company was aware of such a tendency and suggested property developers should be cautious in investing in shopping malls.

A successful shopping mall needs a professional team with capabilities of operation, management, proper position and tenant recruiting, said Chen.

Chen advised domestic developers to stay focused on their core business.

"In spite of consistent policy curbs toward the residential market, homebuyers' demand remains firm and we do not see the home market collapsing within the next five years," he said.

More than 90 percent of listed developers have their profits generated from the residential sector, suggesting a great contribution from house building, added Chen.

Shi Jing in Shanghai contributed to this story.