Core Viewpoint - Morgan Stanley reports that Hong Kong's unemployment rate rose by 0.2 percentage points to 3.9% in the third quarter, reaching a three-year high, with significant challenges in the construction and retail sectors [1] Employment Data - The unemployment rate in the construction industry is at 7.2%, while the retail sector stands at 5.3% [1] - The unemployment rate in the restaurant industry remained stable at 6.4%, and the financial sector saw a slight improvement, increasing by 0.3 percentage points to 2.9% [1] - The underemployment rate remained stable at 1.6% [1] Future Projections - The overall unemployment rate is expected to rise further, potentially exceeding 4% by the end of 2025 due to macroeconomic uncertainties and structural challenges in the restaurant and retail sectors [1] - Despite recent positive trends in retail sales, the rising unemployment rate may negatively impact consumer sentiment [1] Retail Sales Impact - Retail sales growth is projected to slow to 2% year-on-year in September [1] - High vacancy rates in office buildings may negatively affect companies like Link REIT and Wharf Real Estate Investment Company [1]

Core Insights - The Shenzhen retail property market is experiencing a dual activation of supply and demand, with significant new project entries and strong absorption rates [1][2] Supply Overview - In Q3, two new projects were launched, adding a total supply of 225,000 square meters, bringing the total market stock to over 8 million square meters, a quarter-on-quarter increase of 2.9% [1] - By the end of the year, total retail property stock is expected to reach 8.188 million square meters, reflecting a year-on-year growth of 11.2% [2] Demand Dynamics - The market's absorption performance in Q3 was notably strong, with new projects opening at high pre-leasing rates and existing projects maintaining stable occupancy rates [1] - The net absorption for the quarter was recorded at double the average level of the past five years, leading to a slight improvement in vacancy rates, which decreased by 0.3 percentage points to 6.8% [1] Brand Landscape - The "richness" of the Shenzhen retail market emerged as a key highlight, with significant brand renewals in benchmark projects and the introduction of new high-quality projects featuring brands like Zegna, APPLE, and Staple [1] - This diversification enhances consumer choices and further elevates the brand variety in the Shenzhen retail market [1] Rental Trends - Despite the overall stable performance in tenant occupancy, the rental index for retail properties remained flat quarter-on-quarter and decreased by 0.8% year-on-year, with the average rent recorded at RMB 524.7 per square meter per month [1] Future Outlook - The supply pace in the Shenzhen retail property market is expected to slow down in Q4, with only one new project anticipated to enter the market [2] - The local owners and commercial operation teams are expected to become more responsive to changing consumer preferences, accelerating the pace of brand renewal and solidifying Shenzhen's leading position in retail brand diversification in South China [2]

Core Insights - The report by CBRE highlights that there were no new commercial projects delivered in Beijing's premium retail property market in Q3 2025, with two mature commercial entities in core and peripheral business districts ceasing operations [1] - An estimated 394,000 square meters of new retail properties are expected to open in non-core districts over the next six months, including partially operational projects like Zhongguancun Dalu City and Longfu Temple Phase II [1] - The restaurant sector saw a decline in new openings, with the proportion of new dining establishments dropping by 4 percentage points to 43% compared to the previous quarter, while tea and juice, as well as baked goods, showed strong performance [1] Retail Sector Performance - The proportion of new store openings in the apparel retail category remained above 30%, with a significant increase in new stores for men's and women's clothing, while the sports and outdoor segment slowed down [1] - High-end luxury brands have reduced their expansion, leading to closures in several core business district projects [1] Non-Core District Trends - Lifestyle service sectors such as beauty, fitness, and supermarkets remain active in non-core shopping centers, with a focus on emotional value-driven offerings like pop-up stores [2] - The outer business district projects have seen a 12 percentage point increase in new store openings compared to the previous quarter, although the overall net absorption rate for the city was negative, causing a slight increase in vacancy rates to 7.7% [2] Rental Market Dynamics - Due to cautious consumer demand and high rental capacity, many commercial entities have adjusted their leasing strategies, resulting in a decline in average first-floor rental rates, which fell by 0.6% to 30.6 yuan per square meter per day [2] - Secondary districts experienced a drop in rental rates due to intense competition and a high number of renovation projects [2] Policy Impact - Recent policies from the Ministry of Commerce and other departments aim to boost service consumption and enhance retail property market growth through various measures, potentially creating new growth points in the retail sector [2]

Group 1: Market Overview - The Hang Seng Index rose by 494 points or 1.89%, closing at 26,622 points, with a trading volume of 3,090.96 million [3] - The market showed a strong performance with 78 out of 88 blue-chip stocks rising, including notable gains from HSBC (2%), AIA (3.7%), and Hong Kong Exchanges and Clearing (2.8%) [3] - The market sentiment is cautious ahead of the National Day holiday, with expectations of short-term consolidation for the Hang Seng Index [2][3] Group 2: Macroeconomic and Industry Dynamics - The Hong Kong Investment Corporation has invested in over 130 companies, primarily focusing on artificial intelligence and biotechnology, with about 20% of funds allocated to biotech projects [6] - The Hong Kong stock market has seen over 75 biotech companies listed since the 2018 listing reform, raising over 300 billion USD [6] - Citigroup upgraded its rating on Chinese stocks to "Overweight," citing optimism about artificial intelligence and strong capital inflows into the local market [7] Group 3: Company News - 恒隆集团 (Hang Lung Group) expressed cautious optimism regarding the recovery of the retail market in mainland China, noting that the most challenging phase has passed [10] - 京东工业 (JD Industrial) plans to raise approximately 39 billion HKD through an IPO, with projected revenue growth from 14.1 billion to 20.4 billion RMB from 2022 to 2024 [11] - 优必选 (UBTECH) secured a procurement contract worth 30 million RMB for humanoid robots, bringing total contracts for its Walker series to nearly 430 million RMB [12]

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]