Hot links: The week in Asia Pacific retail property news
Publish Date: August 28, 2014
Here's what news sources in Asia and Australia are reporting about the local retail property scene.
• Asia’s retailers target Vietnam — News VietNamNet Retailers based in other Asian countries are competing for the Vietnamese consumer. In September South Korea–based Lotte will open a mixed-use development that includes a six-floor department store, and it plans to open 60 supermarkets across the country by 2020. Meanwhile Japan-based Aeon plans to build 20 shopping centres by 2020.
• Demand for malls soars in Indonesia — The Jakarta Post An improved economy in Indonesia has spurred the population to shop more. In turn, retailers are taking notice and are urging shopping centre developers to create more space for them. That could happen soon. There are 21 future retail developments totaling 710,000 square metres in the country, according to Colliers International.
• Renovations pay off at Suntec City — AsiaOne Suntec City mall in Singapore, which has undergone a multi-million-dollar remodel since 2012, is nearing the completion of the facelift, and stores and restaurants are already experiencing benefits via increased sales and traffic. Tenants estimate that year-over-year customer visits have risen 20 percent.
• Westfield's Scentre Group may sell assets — The Sydney Morning Herald Scentre Group, the owner of malls in Australia and New Zealand that was formed from Westfield Retail Trust earlier this year, might sell some assets to reduce debt. They may include a portion of Bondi Junction in Sydney, Westfield Sydney and Fountain Gate Melbourne. The entity also has a A$5-billion [$4.7-billion] development pipeline.
• More REITs needed in China, exec says — China Daily Asia More REITs in China would help improve the country's sluggish real estate industry, said George Hongchoy, CEO of Hong Kong-based The Link Real Estate Investment Trust. An increase in REITs would encourage more development and put the industry in the hands of expert operators, he said.
• Malaysia mall opening delayed; China scheme scrapped — Bangkok Post Bangkok-based developer Central Pattana Plc (CPN) will delay the opening of its first mall in Malaysia, from 2016 to 2017. Executives said they need more time to study the market. The firm also ditched plans to open a mall in China after finding that the centre would not provide favourable returns. CPN is eyeing Vietnam for a mall.
• Sydney suburb seeks mixed-use retail developer — Campbelltown-Macarthur Advertiser A New South Wales government agency is looking for a developer to build a mixed-use retail town centre in the Sydney suburb Edmonson Park. UrbanGrowth NSW predicts that 25,000 additional people will populate the area in the next 10 to 15 years. The plan is one of five town centres envisioned off the South West Rail Line.
• Mall exec: Aussie retail sales to rise — The Sydney Morning Herald Retail sales in Australia have hit the bottom of the cycle and will start to improve over the course of next year, said the CEO of CFS Retail Property Trust, which owns malls and outlet centres in Melbourne and Sydney. Specialty stores could see an three percent increase in sales over 2015, he said.
• Robinsons Retail launching new store formats — InterAksyon Philippines-based supermarket company Robinsons Retail Holdings is launching two store formats, one upmarket and one discount. It's two current chains, Robinsons Supermarket and Robinsons Easymart, are geared toward middle-income consumers. Robinsons operates about 1,200 stores and plans to have 1,400 by year's end.
• Vietnam sees more mall growth — News VietNamNet Mall growth in Vietnam is not slowing. Japan-based Aeon recently opened a mall in Celadon City and is following up with centres in the Binh Duong Province and the Binh Tan District. Parkson, of Malaysia, has eight locations in Vietnam and plans more this year.
• Melbourne suburbs struggle with vacancies — WA Today Vacancies are on the rise at some retail strips in the Melbourne suburbs, and some say that high rents are to blame. Vacancy is at 7.7 percent in these areas, which have a 15-year average rate of 3.7 percent, according to Knight Frank. Retailers are moving away to cheaper locations, observers say.
• Vulcan Industrial & Mining becoming retail entity — InterAksyon A retail holding company owned by the Ramos family of the Philippines is buying up shares of Vulcan Industrial & Mining and transforming it into a retail owner. The new Philippines based entity will own the Ramos' National Book Store school-supplies chain as well as Powerbooks and Crossings department store.
• Thailand attracts Japanese restaurant chains — Bangkok Post Japan-based ramen-noodle chain Ippudo is the latest restaurant company to make a foray into Thailand. It recently opened to long lines in Bangkok and plans to open three to five more units in the next couple of years. Analysts say that Japanese restaurants are growing 10 percent to 15 percent annually in Thailand.
• S. Korea department-store sales rise — Reuters Though they were lower than expected, South Korea's department stores still posted a significant sales increase in July compared to June. Sales at the country's three biggest chains increased two percent year over year in July, according to the Ministry of Trade, Industry and Energy, which predicted a 4.2 percent rise. In June, they fell 4.6 percent.
• Hari Raya sales in Malaysia disappoint — The Business Times Retail sales during this year's Hari Raya celebrations in Malaysia were less than industry observers had expected. Consumers are spending less due to rises in electricity and fuel prices. A lack of incentives from the government are also blamed for the sales slump.
• Shinsegae flagship launches upscale food offerings — IGD Retail Analysis South Korea–based department store chain Shinsegae has launched a new luxury food hall concept in its Seoul flagship that offers both dining and groceries. Some of the area's features include prepared food to go, a juice bar and a wine cellar where customers can pair cheese with vintages.
• FamilyMart opens up Philippine franchising — Philippine Daily Inquirer Japan-based convenience store chain FamilyMart is opening up its business in the Philippines to a wider base of franchisees. The current franchisee is operated by a joint venture between SSI Group and Ayala Land. The new measure would allow private individuals to own stores under the JV's supervision as the chain expands.
• Luxury watch sales expected to rise in Singapore — AsiaOne Luxury watches, which saw a sales decline over the second half of the year in Singapore, are expected to bounce back during the remainder of 2014. A lack of luxury spending by Chinese tourists was a contributor to the sales dip, but a coming Formula One race, year-end bonuses and the holidays could spark a rebound.
• Williams-Sonoma opens Sydney stores — Appliance Retailer San Francisco–based Williams-Sonoma opened four outlets this week in Sydney. Its eponymous chain, as well as Pottery Barn, Pottery Barn Kids and West Elm all opened at Chatswood Chase Shopping Centre in the city's North Shore area. It entered Australia with stores in Sydney's Bondi Junction in May of last year.
• Specialty Fashion's sales up, though profits dip — The Sydney Morning Herald Specialty Fashion Group, the Australia-based company that operates the chains Millers, Rivers and City Chic, reported that sales so far in its 2015 fiscal year have risen year over year. However, its 2014 fiscal-year profit came in at A$12.5 million [$11.6 million], down from $13 million the prior 12 month period.
• Retail tech 'lab' opens in Melbourne — Business Review Weekly Taiwan-based technology firm AOPEN debuted the Gen2 Retail Evolution Lab in Melbourne. The outfit wants to partner retailers with small Australia-based tech firms to enhance stores' digital signage. Innovations include digital dressing-room assistants and touch screens outside stores where one can shop during non-business hours.