Tokyo is the most important market for retailers looking to enter the Asian market.

 

According to a new research from CBRE, Tokyo has established its position as the top destination for international retailers entering the APAC area, with 464 new retail arrivals in 2014, a 23 percent increase over 2013. qatar property finder

Tokyo had the most new retail arrivals (63), followed by Singapore (58), Taipei (49), Hong Kong (45), and Beijing (45), according to CBRE (34).

In addition, the Luxury and Business sector experienced the most new arrivals (22.6 percent), whereas the Coffee and Restaurants sector saw the most growth (22.4 percent in 2014, up from 14.8 percent in 2013).

With 24 percent, retailers from the United States made the greatest new entrance into Asia Pacific, followed by 11 percent from Italy and the United Kingdom, and 10.5 percent from France. Japan was the top APAC entrant, ranking fifth, with Japanese merchants accounting for 6.9% of new market entries.

"International retailers have long sought to establish themselves in Asia Pacific, by first establishing themselves in more mature markets such as Japan or Hong Kong, before using this as a base to launch into other markets in the region," said Jonathan Hsu, Head of Occupier Markets Research, CBRE Asia. In 2014, Tokyo solidified its position as the top destination in APAC for foreign retailers looking to enter the market. The growth in domestic spending as a result of Japan's economic recovery, as well as anticipation for the 2020 Tokyo Olympics and substantial growth in visitor arrivals, all contributed to this market's appeal as a gateway market. The demand has been concentrated in the city's main commercial districts."

"As gateway markets, Singapore and Hong Kong have attracted a lot of international interest and will continue to draw new businesses," Hsu continued. Merchants in Hong Kong, on the other hand, will have to react to lower demand for luxury products from Mainland Chinese tourists, while the chronic labor shortage in Singapore remains a major problem for retailers trying to expand."

"The significant rental increase of prime CBD retail property was fueled by the migration of multinational quick fashion firms and luxury groups into Sydney and Melbourne. Sydney will continue to witness significant asset enhancement efforts in its core districts to meet high demand for flagship stores from new retail arrivals. Retailers' attention to regional differences and customizing product mix to meet local consumer needs will aid integration success," Hsu said.

"Drawn by factors such as the region's rising middle class and urbanization, overall demand from multinational retailers looking to open stores in Asia Pacific remained robust in 2014," said Joel Stephen, Head of Retailer Representation, CBRE Asia. We've seen some intriguing dynamics emerge in the last year, particularly in relation to Japan and Australia. More domestic players are going outside as foreign merchants begin to establish themselves in those markets—local markets are becoming more competitive due to limited supply, particularly in high-street retail space."

"In 2015, we forecast a rise in retail sales across the area, but with merchants taking a more cautious stance. They'll plan shop networks more strategically, concentrating on tried-and-true retail locations. CBRE predicts that inexpensive F&B will continue to be the most active retailer sector in the region. Consumers in Asia Pacific are hungry for new ideas, and landlords are eager to turn their properties into hotspots by expanding their dining alternatives. Smaller brands from large groups, as well as new names to the region, will drive expansion demand in the luxury sector. Their profile will be more diverse, and they will intend for a smaller-scale expansion, so demand will be concentrated in developed markets like Japan, Singapore, Hong Kong, and Australia, with China being a lower priority due to the ongoing anti-corruption effort.

"Other active areas in Asia Pacific include bridge brands and specialist shops such as lingerie and sportswear, with a greater emphasis on in-store experience and service." Value fashion will concentrate on expanding its footprint in underserved regions such as Australia and Taiwan, as well as heavily populated markets such as China, India, and growing Southeast Asia," Stephens said.