Beijing's retail vacancy rate falls

The vacancy rate in Beijing's core retail market decreased by 1.5 percentage points quarter-on-quarter to 4 percent in the fourth quarter of 2013, the second-lowest level since the first quarter of 2000, according to a report on Thursday by global real estate investment management firm Jones Lang LaSalle.

Persistent demand for prime retail space in the city was reflected in the frequent tenant adjustments at mature shopping center projects and in the high occupancy rates achieved at newly completed projects throughout 2013.

By retailer segment, fast fashion brands and mid-market fashion labels were active in the leasing market. Food and beverage operators, as well as tenancy in the entertainment sector, also continued to expand, a trend that was consistent throughout last year.

Shopping center landlords were keen to be more creative in refining the mix of tenants to counter fast-rising competition from e-commerce trades, according to the report.

The reduction in the stock of lease property has led to sustained rental growth, particularly in Beijing's core market.

"Rising competition from e-commerce trades coupled with softer demand from up-market retailers have seen some shopping center landlords developing plans to convert part of their retail portfolios for other commercial usage," said Alice Law, head of retail leasing at Jones Lang LaSalle, Beijing.

This will reduce the supply of retail space in some locations and provide support for rental growth.

"We expect leasing demand will remain healthy in 2014, and Beijing is not expected to run into any oversupply risks," Law said.