35% of Asia-Pac retailers eye expansion in Singapore

Expansion ambitions tempered by trading woes.

According to CBRE’s latest global research report “How Active are Retailers Globally," when looking at the target markets by retailers’ region of origin, the survey found that Asia Pacific retailers are largely focused on expanding in their own region.

All of the top ten target destinations for expansion in 2014 are within Asia Pacific. China is a target for 58% of Asia Pacific-based retailers, making it the most sought after market, followed by Vietnam (48%), Malaysia (42%), Indonesia (39%) and Singapore (35%).

China leads the way for Asia Pacific, ranking as the fifth most popular destination for global retailers, with 22% of surveyed retailers targeting the market in 2014.

Alongside Hong Kong; Singapore, Vietnam, Indonesia and Malaysia are also featured in the top 20 target markets worldwide.

The report also noted that Singapore and Vietnam benefit from rapid development of their tourism industries and operational cost that are more reasonable than Hong Kong.

“The relatively lower levels of interest by Asia Pacific retailers in expanding in American and European markets reflect a cautious attitude to expanding out of their core markets, but that said we are beginning to see a number of Asia-based brands working on strategies for global markets,” commented Mr. Sebastian Skiff, Executive Director of CBRE Retail.

Retailers’ expansion plans in Asia Pacific are relatively modest, with 29% planning to open less than five stores and a further 26% looking to open between 5-10 stores in 2014.

“Most retailers active within Asia Pacific have tended to focus operations within a few countries, and locations are generally limited to the key or top tier cities where quality retail space is accessible.

Tougher trading conditions in most markets has tempered expansion ambitions for the short term, however, over the longer term we expect economic growth and the rising middle class in Asia to spur further growth,” said Mr Skiff.