redirect pin user minus plus fax mobile-phone office-phone data envelope globe outlook retail close line-arrow-down solid-triangle-down facebook globe2 google hamburger line-arrow-left solid-triangle-left linkedin wechat play-btn line-arrow-right arrow-right solid-triangle-right search twitter line-arrow-up solid-triangle-up calendar globe-americas globe-apac globe-emea external-link music picture paper pictures play gallery download rss-feed vcard account-loading collection external-link2 internal-link share-link icon-close2


Full recovery clouded by emergence of new COVID-19 variants; retailers advised to take advantage of slow leasing activity to source prime units; retail rents expected to see mild growth.




Trends to Watch

  1. Sharper focus on Experience

    With the shift to online consumption during the pandemic having come at the expense of physical retail, retailers and shopping centres must differentiate their experience to lure shoppers back to brick-and-mortar stores. Approaches may include more thematic stores, promotional events and expanded display areas and showrooms. New F&B concepts will be an important element in attracting customers to shopping malls.

  2. Omnichannel Sales and Delivery

    With consumers spending more time in retail locations near their homes, demand is growing for a broader and faster range of delivery options for online purchases. This year will see more retail stores equipped with click-and-collect services or serving as last mile fulfillment hubs. At the same time, more retailers will enable customers to place online orders at physical stores to provide hands-free in-store shopping while reducing the need for in-store inventory.

  3. Sustainable Shopping

    Consumer awareness of sustainability, especially among younger shoppers, will force retailers to be more environmentally and socially responsible. As retailers make bolder commitments to reducing their carbon footprint; this will impact store concept design and lead to the inclusion of green clauses in leases. In Hong Kong SAR, New World Development recently launched a "Creating Shared Value Lease" that rewards office and retail tenants for adopting environmentally and socially sustainable practices2.

2 Source: New World Development, November 2021


Emergence of COVID-19 Variants to Dampen Pace of Recovery

Although the spread of the Delta variant of COVID-19 in mid-2021 weighed on the pace of the retail recovery in H2 2021, consumer footfall had almost fully recovered to pre-pandemic levels by the end of the year along with the easing of restrictions and rising vaccination rates.

CBRE retains a positive outlook for regional consumption in 2022, with 74% of retailer respondents to CBRE’s Asia Pacific October 2021 Retail Flash Survey expecting further sales growth in 2022. However, the pace of growth in discretionary consumer spending will moderate from last year’s exceptional 14.5% as the effect of ‘revenge shopping’ dissipates and sales of big-ticket items decline. Consumption patterns will return to normal, with CBRE anticipating a shift to more experience and service-based trades such as F&B and entertainment.

The emergence of the Omicron variant of COVID-19 in December 2021 has added fresh uncertainty to the retail market outlook. Moves by several Asia Pacific markets to tighten social and border restrictions in January 2022 will weigh on consumer confidence and delay the recovery of tourist-oriented retail categories.

Figure-11click to enlarge


Cautious Retailer Expansion Anticipated

Expansionary demand is expected to strengthen this year, with around two-thirds of retailer respondents to CBRE’s Asia Pacific October 2021 Retail Flash Survey aiming to open more stores in 2022. However, the pandemic will continue to weigh on retailer sentiment and leasing activity, prompting retailers to be more cautious before committing to major expansionary moves. Coupled with the fact that the first few months of the year is traditionally a quiet period for new leases, demand is expected to be relatively sluggish in Q1 2022, with a recovery likely to pick up from Q2 2022 onwards.

Prime locations will remain keenly sought after as retailers take advantage of tenant-favoured markets to secure lower rents and better locations. Retailers, especially domestic brands, will remain proactive in relocations and expansions involving upgrading, with luxury groups paying particular attention to enhancing flagship stores. Markets such as in Tokyo (Ginza), Hong Kong SAR and Shanghai, where vacancy has peaked or begun to fall, have seen asking rents increase in recent months. While demand for neighbourhood retail space will remain healthy, secondary space in shopping or business districts is expected to see only lukewarm demand.

CBRE expects international retailers to display a stronger appetite for expansion in Asia Pacific in 2022. However, activity will be driven by brands with sound local market intelligence and established management teams. New-to-market brands will remain cautious in the absence of the resumption of international business travel. CBRE expects tier I cities in mainland China to see stronger demand, partially due to local authorities’ preferential policies and keen competition between landlords of prime shopping centres to attract new tenants. Vietnam and India will also welcome more new entrants, assisted by the adoption of franchising and partnership models with major landlords.

While retailers in the F&B category will remain active, demand will be driven by casual dining restaurants, which typically require smaller shop sizes and lower upfront costs. Many restaurants are exploring new business models such as by opening stores catering exclusively to takeaways, drive-thrus or partnering with on-demand delivery apps for dark kitchens. This trend is expected to be more prominent in neighbourhood areas as F&B operators look to capture demand from a rising population of remote workers.

While major fast fashion chains saw a return to revenue growth in 2021, the success of online platforms means they are in no rush to expand physical sales networks. Many retailers in this segment will continue to consolidate store networks as their leases expire. However, their overall footprint is likely to remain stable as they will still expand stores in profitable locations.

Lower rents will encourage the expansion of service-oriented retail such as beauty clinics, medical centres and larger space occupiers including entertainment. Secondary retail space will nevertheless take longer to absorb.



Mild Rental Growth Forecasted

The recovery in regional retail rents will continue in 2022 as more markets return to growth. Expansionary momentum will continue to be led by selected outperforming street shops and malls, while secondary retail, even those properties located in core locations, are likely to undergo further rental cuts along with tenant outflows.

While mainland China and Hong Kong SAR will see rental growth accelerate from 2021, it will remain in the low single digits. Rents in Hong Kong SAR stand 60% below the previous peak in 2013/2014, enabling retailers to re-enter and re-locate to better locations.

High street shops in Taipei and most Australian CBD retail districts will undergo a further rental correction this year, albeit at a milder rate. Rents are expected to remain weak amid high vacancy and a lack of international students and tourists. CBRE nevertheless expects a quick turnaround in rents should international travel resume more quickly.

While CBRE expects the retail leasing market to continue to favour tenants in 2022, the tide will gradually turn as landlords adopt a risk-sharing approach to leasing involving the wider adoption of turnover rent clauses and more fit-out subsidies and tenancy improvements.

Pop-up stores or shorter leases will continue to gain traction among general retailers as this enables them to test the consumer response to their products while helping landlords refresh their tenant mix more regularly.

click to enlarge


From Strategy to Action


  • Capitalise on tenant-favoured markets by locking in attractive space while terms remain attractive.
  • Leverage brick-and-mortar stores to engage and attract online and offline consumers. Store format and experience should reflect the characteristics of individual markets in order to enhance operational efficiency and consumer satisfaction.
  • Enhance click-and-collect options and incorporate brick-and-mortar stores into last mile logistics networks. Retailers are advised to form partnerships with third-party companies to utilise underperforming space such as gas stations for quick deliveries.


  • Embed turnover rent clauses and regular rental review terms into leases to capture the market recovery.
  • Adopt a proactive approach towards introducing new-to-market brands and increase the portion of experience driven retailers.
  • Identify and nurture domestic retailers or start-ups with growth potential and upgrading demand to deepen their connection with the community they operate in.
  • Improve the environmental performance of shopping centres by introducing more efficient energy and waste management and making greater use of greenery. Owners should also support tenants in pursuing their sustainability goals, such as by improving the provision of data for a building’s environmental footprint and adopting green leases.

Asia Pacific Real Estate Market Outlook 2022


Online Data Dashboard

provides dynamic delivery data for all sectors.

Learn More

Stay Connected

Read More


Manish Kashyap
Global President, Advisory & Transaction Services
Advisory & Transaction Services
+65 6326 1220
+65 6225 1987
Dr. Henry Chin
Global Head of Investor Thought Leadership
& Head of Research, APAC
+852 2820 8160
+852 2810 0830
Ada Choi
Ada Choi, CFA
Head of Occupier Research, APAC
& Head of Data Intelligence and Management, APAC
+852 2820 2871
+852 2810 0830
Liz Hung
Asia Pacific
+852 2820 6557
+852 2810 0830