Asia-Pacific retail rent growth “remains sluggish” as Europe’s debt crisis causes retailers to put expansion plans on ice, said property broker CBRE Group Inc.
An index of 16 Asia-Pacific market rents recorded an increase of 0.4 percent in the three months ended March 31 from the prior quarter, CBRE said in an e-mailed report. Hong Kong’s average prime rents rose 1.9 percent, slowing from the 3.3 percent growth recorded in the fourth quarter of 2011, while rents across south-east Asia and in Australia and New Zealand fell 0.3 percent.
“The sluggish rate of growth was due to domestic retailers exercising more caution towards further expansion amid the still uncertain economic outlook,” CBRE said in the report. Other factors included resistance to high rents demanded by landlords and rental discounts offered for space in new projects, according to the report.
While Asian economies are expected to expand by about 6 percent in 2012, similar to last year, they still face risks from the European debt crisis, the International Monetary Fund said in April. Retail sales growth across Asia Pacific excluding Japan slowed to 11.6 percent in the first quarter from a year ago, compared with a 13.7 percent expansion in the previous three months, CBRE said.
While retailers still expanded and entered new cities during the quarter, the pace of growth slowed, according to the report. Luxury brands continued to push into new markets, particularly in Greater China, Hong Kong and Singapore, it said.