The People’s Republic of China (commonly known as China or the PRC) is located in East Asia. A decade of strong economic growth, rising household incomes, and rapid urbanization coupled with government initiatives aimed at boosting domestic consumption have fueled rapid growth in China’s retail sector.

With international brands overwhelmingly positive about China’s potential as a retail market, China is becoming key to business strategies of many global retailers. For many retailers, China is a must-win market and according to WLA (World Luxury Association), it is now the world’s fifth largest luxury market. While Europe continues its bailout programs following the debt crisis that started in 2009, China has become a hot spot for investment globally, with FDI taking the top spot in 2014, surpassing the US. China’s huge population base and rapid urbanization are two key drivers of retail sales. Among the 20 major cities, there are over 7 with a population over 10 million. According to a study from McKinsey, there will likely be 350 million more new urban residents and upwards of 200 cities with a population of over 1 million by 2025, approximately 3 times that of the US. From this perspective, China’s urbanization story is still in its early stages.

ECONOMIC INDICATORS*20112012201320142015F2016F
GDP growth
Consumer spending
Industrial production
Unemployment rate (%)
RMB/€ (average)
RMB/US$ (average)
Interest rates 3-month (%)
Interest rates 10-year (%)

Note: *annual % growth rate unless otherwise indicated. E estimate F forecast

Source: Oxford Economics

Population 1.367 billion (2014)
GDP63.64 Trillion RMB (2014)
Public sector balance NA
Governing PartyCommunist Party of China
Head of StateXi Jinping
Prime Minister Li Keqiang
Election DayMarch 2018
Retail Value14.513.

Source: Oxford Economics; National Bureau of Statistics of China

Chongqing 29,700,000
Shanghai 24,150,000
Chengdu 14,178,000
Guangzhou 14,000,000
Cushman & Wakefield Inc, China

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Beijing: 39.904214, 116.407413
Shanghai: 31.230393, 121.473704
Tianjin: 39.084158, 117.200983
Chongqing: 29.563010, 106.551557
Hangzhou: 30.274089, 120.155069
Xi’an: 34.264987, 108.944269
Wuhan: 30.593087, 114.305357
Harbin: 45.803775, 126.534967
Jinan: 36.665282, 116.994917
Chengdu: 30.658601, 104.064856
Guangzhou: 23.129163, 113.264435
Shenzhen: 22.543099, 114.057868
Shenyang: 41.805720, 123.431470
Dalian: 38.914003, 121.614682

Major Domestic Food Retailers

Vanguard, Trust Mart, Hualian, RT-Mart.

Major International Food Retailers

Carrefour, Walmart, Tesco, Metro

Major Domestic Non-Food Retailers

Gome Consumer Electronics, Suning Consumer Electronics, Brilliance, Dashang, Parkson, Metersbonwe, Septwolves

International Retailers in China (a selection)

Eland Group, Ikea, Bestseller, Inditex Group (Zara, Bershka, Pull & Bear etc), Mango, H&M, Basic House, Sephora, VF Corporation, Nike, Adidas, Apple

Food & Beverage Operators

Starbucks, Costa Coffee, Haagen-Dazs, Break Talk, Dairy Queen, Ichido, Ajisen Ramen, Burger King, YUM! (KFC, Pizza Hut), McDonald’s, Wagas, Subway, Element Fresh, Haidilao

10:00 am - 10:00 pm10:00 am - 10:00 pm

Applied to shopping malls during normal operation hours.

There are some minor regional and seasonal variations in opening times

Chinese retail market trends. 1. Expansion of China’s 2nd and 3rd-tier retail markets, where new opportunities are still untapped compared to the country’s larger cities, will continue. However, adapting to local market environments and consumer shopping habits will remain a challenge for developers. 2. While many international luxury brands have not achieved high sales revenues in recent years and thus slowed their pace of expansion, some still have plans in action. 3. Landmark projects located in core submarkets will have rising rents, while those in regional or emerging submarkets will experience more modest rental growth. Chinese developers have tended to favor shopping centers that are often built too large, leading to challenges leasing all space and a lower quality of consumer experience.

Expansion of International Retailers. The consumer market in China is projected to earn USD 4,200 billion USD in 2016, which would replace the United States as the largest retail market for the first time ever. As such a market, China has attracted the attention of most international retailers. International brands ranging from luxury, fast fashion, entertainment, F&B, and home are expanding fast. Givenchy is looking to open 20 stores over the next two years, on top of their current ten Chinese outlets. Jimmy Choo plans to open four to five stores per year in China’s 1st and 2nd-tier cities. Furla plans to open 100 stores in China as part of a joint venture with Hong-Kong based Fung Group. Uniqlo is hoping to work toward its goal of 1,000 stores in China by opening 100 stores per year.

Shopping centers have a bright future. Although at the present, department stores dominate the retail real estate market in 2nd-tier cities, many international retailers prefer shopping center format. As purchasing power and demand for an integrated shopping experience increase, shopping centers will begin to dominate the market. While there is risk in some cases of shopping center failure due to many developers lack of management experience, retailers will continue to seek out well-located and well-managed centers. Hang Lung Properties has invested in new malls in Dalian, Kunming, and Wuhan, to add to their already extremely popular Plaza 66 and Grand Gateway 66, both in Shanghai, along with malls in Jinan, Shenyang, Wuxi, and Tianjin.

E-commence China. Compared with United States and other developed countries, China’s e-commerce industry has a large growth potential. In 2014, China’s e-commerce market continued its rapid expansion, extracting some sales from traditional department stores and supermarkets, but having a lesser influence on the experiential type shopping centers. With developments such as Alibaba’s Tmall, rapid development of e-commerce has brought new business opportunities for the logistics warehousing industry.


GR Shopping MallBeijing 680,0002004
New South China Mall Dongguan 659,612 2005
Beijing Mall Beijing 320,000 2005
Grandview Mall Guangzhou 280,000 2005
Superbrand Mall Shanghai 240,000 2005
Chaoyang Joy CityBeijing230,000 2010
ZPLAZA Beijing 200,000 2006
Mixc Shenzhen 188,000 2004
Beijing SKPBeijing180,000 2007
Cloud Nine Shanghai 170,000 2005

New Entrants to the Market

Peuterey Abercrombie & FitchCarolina Herrera Edenpark Victoria’s Secret
Claire’s Gucci Kids Faconnable Sergeant Major Ted Baker
PrimarkGalerie InnoVeritasKrëfelCool Cat / America Today

Lease Terms2 to 3 years for most smaller tenants in shopping malls 5 years or longer for F&B tenants in shopping malls Up to 15 years for fashion anchors Up to 20 years for hypermarkets
Rental PaymentIn street shop locations rents are typically base rent only, in department stores a percentage of sales only is payable, while in shopping malls the emerging standard is to pay the higher of base rent or a percentage of sales.
Rent ReviewBasis of the rent review is open market rental value, and the frequency is negotiable.
Service Charges, Repairs and Insurance Tenant is typically responsible for maintenance within their own premises. Landlord is responsible for maintenance of common areas and this is charged back through a management fee which is typically RMB 70-100 per sq.m per month for shopping malls in Shanghai and Beijing. An additional promotion fee may also be charged. Landlord is also responsible for the external and structural maintenance of the property. Tenant is often required to take out insurance for fire and 3rd party liability.
Property Taxes and other costs Landlords bear all property related taxes such as Urban Real Estate Tax, business tax for rental income. Landlords and tenants normally share the stamp duty cost, which is minimal.
Disposal of a LeaseAssignment / Sub-letting is typically not allowed. And early termination is by negotiation only, however non performing tenants often negotiate early termination. About the Tenant’s Building Reinstatement Responsibilities at Lease End, typically is original condition, however many landlords willing to negotiate at the time of withdrawal.
Valuation MethodsRetail valuation methodologies are not very well established however international methodologies such as RICS are increasingly recognized.
LegislationGuangzhou and Shanghai have standard leases but Beijing and most other Chinese cities do not. The standard leases can be adapted by means of supplementary clauses.

China Contacts


Head of Retail Tenant Representation, China
Units 2606-2609, The Headquarters Building
168 Xizang Zhong Lu, Shanghai, China
Tel: +86 (0)21 2320 0808
Mob: +86 186 1695 0300


Director, Retail Tenant Representation, China
Units 2606-2609, The Headquarters Building
168 Xizang Zhong Lu, Shanghai, China
Tel: +86 (0)21 2320 0843
Mob: +86 137 6110 4593


Manager, Retail Tenant Representation, China
Units 2606-2609, The Headquarters Building
168 Xizang Zhong Lu, Shanghai, China
Tel: +86 (0)21 2320 0816
Mob: +86 139 1748 1947