Hong Kong and Tokyo Maintain Gateway Status in face of High Rent

Southeast Asia and China Show Growth on New Supply

*The Japanese translation of this release was disseminated in Japan on the date above. Please note that the original version of this release was announced in English on December 2.

Hong Kong, December 2, 2013—Developed markets such as Hong Kong and Tokyo remained the preferred entry point for retailers in Asia Pacific, particularly for retailers in the luxury and business category. Hong Kong saw 28 new stores open in the first three quarters of 2013, while Tokyo saw 20.

“That Hong Kong and Tokyo saw so many new entrants is particularly impressive given the fact that they are already well served by the majority of global retailers, and have the ongoing challenge of high rents and a shortage of new space. Groups new to the region see Hong Kong, Singapore and Tokyo as their first port of call and a step towards entering other markets in the region,” said Sebastian Skiff, Executive Director of CBRE Retail, Asia.

While retailers entering the region for the first time continued to opt for Hong Kong or Tokyo, in comparison, groups already established in Asia Pacific focused on expansion into emerging cities. Emerging markets in Greater China and Southeast Asia in particular saw growth. This came off the back of a steady new supply of prime retail space and growing consumer spending, notably in cities such as Hanoi, Manila, Beijing, Shanghai and Hangzhou. Seoul and Taipei have also seen increasing interest.

“Around 70% of new market entries in Asia Pacific in the first three quarters of 2013 were in emerging markets, against a 50/50 split in 2012. This was driven by a combination of retailers established in gateway cities looking to branch out, and new prime locations becoming available in cities that lacked prime space in the past. This gave retailers an opportunity to expand that they hadn’t had before,” said Mr Skiff.

Mid to high-end fashion retailers accounted for the largest portion of new arrivals, but the year saw luxury retailers adopt a more cautious strategy in mature markets. Luxury and business retailers accounted for 26% of new entrants in the region in 2013, the same figure as in 2012. Mid-range fashion retailers comprised just over 21% of new entrants compared to 18% last year, whilst retailers of specialist clothing, particularly footwear and underwear, accounted for 16% of new entrants, compared to 12% last year. Retailers from North America and Europe continued to lead expansion across the region, with 54% of new market entrants coming from EMEA, particularly Italy, the U.K. and France. The U.S. accounted for 26% of new entrants.

Domestic consumption is solid in most parts of the region and consumer sentiment remains healthy, so retail sales are expected to continue to see positive growth in 2014 but at a slower rate compared to 2013. Retailers already established in the region, particularly those in mid-range fashion, will continue to focus on emerging markets in Southeast Asia including Indonesia, Thailand, the Philippines and Vietnam for new market entry and expansion given continued growth in domestic consumption and the rising middle class populations. Taiwan and Australia will also become a major focus.

About CBRE Gro​up, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.​