Retailers turned more active in looking for new leasing opportunities in Q1 2021, especially in prime locations. However, new openings remained limited outside mainland China.
The period saw strong leasing demand from established automotive companies’ New Energy Vehicle (NEV) brands, along with numerous mainland Chinese NEV manufacturers. Retailers in this category are seeking prime units in shopping malls or street shops in mainland China, Japan, and Korea for high profile showrooms to maximise brand impact.
Despite asking rents leveling out, retail landlords retain a flexible stance towards incentives and other terms. In addition to landlords’ provision of CapEx contributions, several leases signed this quarter featured turnover rent clauses or profit-sharing models.
While the leasing market will continue to favour tenants in the medium term, retailers are advised to move quickly to lock in leases for prime units, for which availability is beginning to tighten.