Urbis Think Tank
The amazing world of Shanghai retail
Urbis is a world leader in the analysis of the Asian retail property market, and in 2011, we undertook a number of studies in Shanghai, across a range of centres. One of the striking findings was the difference between the extent of trade areas in Shanghai and Australia. This comparison is illustrated below.
With far higher population density, centres in Shanghai are able to trade from a far more compact area. As a result, the way that shoppers use centres is different. There is a greater focus on daily visitation and regular convenience shopping, with the centre accessed on foot or by public transport. This means that average spends per visit are typically lower than they would be in a centre visited weekly by car. It also means there is a greater focus upon food and beverage and lower order products in the mixing of such centres, right through from specialty tenants to the majors that anchor them.
The difference in the way the centres are used also impacts broader aspects of the development.
- Because catchments can be so geographically small, and walk-up or public transport use is higher, the acceptable parking provision at centres in Shanghai can be much lower than in Australia. This alters the development economics of centres, as the ratio of net to gross built area is closer.
- Population density allows for far more comprehensive public transport options, making this a far more popular alternative in Shanghai. Public transport links are far more important for your typical Shanghai shopping centre.
- Pedestrian links need to be relatively simple in Shanghai due to the fact that walk-up populations are far higher. Being ‘snuggly’ surrounded by residential development in Shanghai is seen as a strength; in Australia it can cause problems.
- The tenancy mix is typically more focused on F&B and leisure/entertainment in centres in Shanghai. With population density comes small apartments, meaning that a lot of the activities that Australians do at home (e.g. having dinner) occur within a shopping centre in Shanghai.
- Density of population allows for density of retail provision. This can result in multiple shopping centres being supportable within a very small geographical area, a situation that is less likely to occur in Australia. However, the capacity to support multiple centres in a small area means that the focus of the centre, and its capacity to provide a unique offering, is far more important to many centres in Shanghai.