Market Overview - In the first half of the year, the market saw a significant supply of 420,000 square meters entering in the second quarter, leading to a total stock increase of 5.7% to 7.783 million square meters [1] - The net absorption in the second quarter rebounded significantly, reaching three times the average level of the past five years, driven by the large-scale new supply [1] - Despite this, the overall average vacancy rate slightly increased by 0.4 percentage points to 7.1% due to the lower occupancy rates of some new projects compared to the existing average [1] Shenzhen Retail Market Insights - The vacancy rate below 10% is considered a healthy level, with notable highlights in the Shenzhen market including stable consumption and unique supply characteristics [2] - New projects and renovations, such as K11 and Garden City, have shown strong consumer attraction and operational adjustments, despite temporarily increasing vacancy rates [2] - The performance of retail properties in Shenzhen is better than in Guangzhou, with significant attention on the first stores in key shopping malls [2] Demand and Rental Trends - In the first half of the year, the restaurant sector remained the primary source of demand, although the proportion of new restaurant openings decreased by nearly 5 percentage points in the second quarter compared to the first [2] - Continuous upgrades of quality existing projects have introduced multiple first stores in various regions, enhancing the diversity of retail brands in Shenzhen [2] - Rental expectations from owners remained stable, with the rental index unchanged quarter-on-quarter but down 1.6% year-on-year, averaging RMB 523.6 per square meter per month [2] Future Supply Outlook - Looking ahead to the second half of 2025, over 450,000 square meters of new supply is expected, with total stock projected to increase by 11.8% year-on-year, surpassing 8 million square meters [3] - Two new projects are anticipated to open in the third quarter, contributing a total of 225,000 square meters of supply [3] - The ongoing brand placements and upgrades in existing benchmark projects are expected to attract more emerging popular brands favored by consumers [3]

Core Insights - The net absorption of retail properties in Shanghai reached 134,000 square meters in the first half of 2025, influenced by new supply and the entry of high-quality tenants [1] - The average daily rental price for retail properties in core business districts slightly decreased to 31.9 yuan per square meter [1] - The demand for the dining sector accounted for 45% of total demand, making it the largest segment, while retail demand increased to 41%, with apparel demand specifically at 23% [1] - Active expansion was noted in trendy apparel and outdoor sports brands [1] - Government initiatives promoting cross-industry collaboration in tourism, culture, and sports have further stimulated consumer potential, enriching the urban consumption experience and revitalizing the retail market [1]

Group 1 - The Hong Kong retail market faced significant downward pressure in the first four months of the year, with total retail sales estimated at HKD 28.9 billion, a year-on-year decline of 5.6% [1] - Despite the challenges, the retail sector is expected to remain stable for the year, although there will be increased pressure from rental adjustments and price changes [1] - The retail landscape in Hong Kong is shifting from traditional shopping to a more diversified experiential approach, necessitating timely adjustments in business strategies [1] Group 2 - The investment property market recorded a transaction volume of HKD 14 billion in the first five months, remaining flat compared to the same period last year, but the number of transactions decreased by 7% [1] - Office properties accounted for the largest share of market transactions at 52%, driven by strong demand for discounted and bank-owned properties [1] - Hotel and serviced apartment transactions followed, making up 20% of the market with a significant year-on-year increase of 430%, attributed to government policies aimed at attracting non-local university students [2] Group 3 - Retail properties faced challenges due to weak local consumption and high labor costs, comprising only 9% of total transactions, while development land accounted for 4% [2] - Looking ahead to the second half of 2025, the market focus is expected to shift towards student accommodation and education-related assets, driven by government initiatives [2] - The Hong Kong government is committed to supporting local universities in attracting more international students, which is anticipated to further stimulate demand for student accommodation [2]

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The Beijing retail market is experiencing a transformation with the introduction of new projects and the renovation of existing ones, driven by changing consumer habits and demands [3][5] - The market is expected to see over 700,000 square meters of quality retail space launched in 2025, primarily from large-scale new projects and urban renewal initiatives [5] - The introduction of new brands, particularly first stores, is revitalizing consumer engagement in Beijing, with 960 first stores expected in 2024 and 800 in 2025 [4] Market Overview - In Q1 2025, three new projects opened in Beijing, adding 356,000 square meters of quality retail space, bringing the total shopping center stock to 1.666 million square meters [3] - Urban renewal projects are becoming the main source of quality shopping center supply, with significant upgrades in both space structure and brand offerings [3] - The trend of upgrading older retail projects is ongoing, with operators taking over and revitalizing these spaces [3] Brand Developments - High-end dining and cultural entertainment brands are particularly active, with notable first stores opening in Beijing, such as Armani Coffee and POOPOSUPER [4] - Independent shops in traditional hutongs are gaining popularity among brands, indicating a shift in consumer preferences [4] Market Outlook - The report anticipates continued support for traditional brands and cultural enterprises, with policies being introduced to promote physical bookstores [5] - Future projects are expected to increasingly incorporate cultural elements, creating distinctive commercial spaces [5] Key Market Indicators - The average rent for prime retail space in Beijing is projected at ¥2,130 per square meter per month, with a vacancy rate of 10.6% [11] - The report provides detailed statistics on various commercial districts, highlighting their stock, vacancy rates, and rental price ranges [11] Major Upcoming Projects - Several significant projects are set to open in 2025, including Beijing Shangde Yintai City and Wangfujing WellTown, contributing to the retail landscape [13]