Shanghai, Beijing, Hong Kong, Singapore and Tokyo are among the top 20 cities where international retailers have the largest presence, according to the 2012 edition of ‘How Global is the Business of Retail?’ by leading global property adviser CBRE.

CBRE’s annual survey, now in its fifth year, mapped the global footprint of 326 of the world’s top retailers across more than 200 cities to identify trends in global retail expansion at national and local levels. The report found that retailers expanded into a wide range of markets in 2011, with 74% of the countries in the survey seeing at least one new leading international retailer entering the market last year. The overall global footprint of retailers grew 2.1%, similar to the previous year, demonstrating that retailers continue to grow their cross-border businesses in spite of a competitive consumer environment. 

On a global basis, London reclaimed the number one position as the most targeted market for international retailers. The city attracts more than half (55.6%) of all international retail brands surveyed, after sharing the top spot with Dubai last year. While Dubai (53.8%) still holds considerable global pulling power, it dropped into second place due to a handful of retailers exiting the market. New York (43.9%) remains in the third position. The United Kingdom also retains a number one position as the world’s most popular national market for international retailers with 56.7% of retailers in the survey present there.

Hong Kong continues to be number one among Asian cities, and ranked sixth globally with 40.5% of retailers having a presence. Singapore (38.9%) occupies the tenth position, followed by Shanghai (ranked #11), Beijing (ranked #13), and Tokyo (ranked #19). The remainder of the top 20 comprises a mix of traditional and emerging markets, providing an indication of how global the international retail business really is.

"The results show very healthy levels of activity in key Asian markets as brands continue to look for new growth opportunities. The continuing rise in consumer purchasing power, and an ever increasing level of fashion sophistication, has attracted the leading global brands to continue investing in new market entry. After opening their first store in a market, many retailers have quickly expanded their footprint,  with brands often now represented at 6 or 7 free standing store locations in major cities such as Tokyo, Seoul, Hong Kong, Beijing, Shanghai, and Singapore,” stated Sebastian Skiff, Executive Director of CBRE Retail Asia. “We are seeing a continued flow of new brands approaching us for help in targeting Asian markets, and we see strong demand for 2013 from US, European, and Australian brands.”

Locally, Chinese cities remained consistent, with Hangzhou again securing a spot in the top 50 (27.9%) and Shenzhen in the top 60 (26.2%). Nanjing, Chengdu, Guangzhou, Shenyang, Tianjin, Dalian, and Suzhou were all featured in the top 100, claiming seven of the last 30 places. Tianjin saw the most movement in the rankings, up six places from the previous year, while the others fluctuated only slightly. 

In shopping centre development activity, Tianjin topped the chart with 2.5 million square metres currently under construction, followed by Shenyang and Chengdu. It is evident that Chinese cities will continue to dominate over the next few years with eight out of the top 10 most-active global retail development markets present in China. Outside China, the most active global development markets are Abu Dhabi, Hanoi, Kuala Lumpur (Klang Valley), and New Delhi.

Joel Stephen, CBRE Director of Retailer Representation, China, commented, “One of the barriers to entry in the Chinese market is an under-supply of good quality real estate in prime areas within key cities. The opening of major malls in these cities in prime locations typically lead to an influx of new to market entrants in Shanghai and Beijing, or new to city entrants in the next tranche of cities. We are also seeing a batch of at least 10 Chinese cities climbing up the Asian city rankings as consumer spending power continues to increase rapidly and more high quality developments open.”

Mr. Stephen concluded, “China is here for the long term. It is hard to see how a global retailer could consider themselves truly global without a Chinese strategy. Whilst entry into the Chinese market may be a key component of a retailer’s future global success, targeting the Chinese consumer abroad is also a fundamental component of a retailer’s current success.”