Robust realty in Beijing
Updated: 2007-08-20 06:50
It has been a carnival year for Beijing shopping malls as an all-time high of more than 6 million sq m of commercial space has hit the market.
Even more impressive might be the size of the malls themselves - giants with floor areas exceeding 1 million sq m account for 70 percent of the total space, according to statistics compiled by China Real Estate Business. Most are clustered in the capital's eastern and western commercial hubs of Chaowai, Yansha, World Trade Center, Xidan, Zhongguancun and Financial Street.
"This year's rapid expansion is not likely to change the overall framework of Beijing's commercial property market. But the mass of supply in several key areas will lead to some surplus," says Zou Yi, general manager of Shanghai-based WISENOVA, a real estate consulting firm.
Most of the new commercial projects target medium- and high-end customers. Most will open in the second half of the year and at the latest before May, 2008.
"Their similar positioning will lead to intensified competition," Zou adds, suggesting that new commercial projects should switch from traditional centers to other locations and suburban regions.
To survive the red-hot competition, a developer has to differentiate its product, says Eric Chan, deputy managing director of Savills Property Services (Beijing) Co.
Several Hong Kong shopping malls provide new experiences for customers, attracting them with novel and interesting approaches, he explains.
Some Beijing commercial projects are also striving to stand out from the competition through distinctive amenities.
The Place poured in 250 million yuan to build an LED "Skyscreen" 250 m long and 30 m wide suspended six stories overhead.
Nan Xincang Culture Street built by Hong Kong International Development Co Ltd employed an historic architectural style that echoes the buildings of old.
Even as competition increases, demand for high-end property continues to grow, in part due to expanding numbers of international retailers.
Foreign retailers that are planning to open shops in Beijing include Lotte from Korea, Isetam and Takashimaya from Japan and Central Group from Thailand, according to property service firm DTZ.
Demand was voracious for retail space in all sectors in the first half of 2007, especially from brands related to sports products. Jewelers and watch makers also arrived, with many famous names opening their first shops in Beijing.
