Uneven impact
Analysts said the financial crisis and economic slowdown were having a divergent impact on different shopping malls. Well-established ones in locations such as Wangfujing and Xidan in Beijing were less affected, as they had a steady stream of customers. New malls, however, felt a greater pinch from the slowdown.
To boost their leasing, one option for developers was to adjust their base tenant focus from high-end luxury retailers to middle-market retailers to ensure a reasonable level of occupancy, Wang said.
"A second option is to reduce effective rents through longer rent-free periods and rental concessions," he added.
Some leading global clothing brands intended to cut their leasing costs by 30 percent to 40 percent in response to bleak growth expectations. Many retailers simply deemed it wise to wait until the business climate improved, according to DTZ.
Sales improve slightly
Despite the current weak retail climate, CIA found that sales of retail property nationwide rose to 6.133 million sq m in the first quarter from 5.688 million sq m in the fourth quarter, echoing the home-buying revival, with the average sales price rising from 6,188 yuan per sq m to 6,567 yuan.
Wang said that given the overall investment environment, interest in retail properties had increased. These properties had transportation access, good construction quality, facilities and stable rental income. Some real estate investors had begun to regard retail properties as one of the better options, said Wang.
In some cities with untapped consumption potential, foreign and domestic developers were continuing to invest in building more retail properties.
Indonesia-based Ciputra Group, for example, plans a 3 billion U.S. dollar project to build shopping malls, hotels, cinemas and high-end residential properties in Shenyang.
Industrial rents ease
Affected by weakening export and import demand, the average rental price for both standard industrial premises and logistics space used as regular company warehouses has declined in Beijing.
The average daily rental for standard industrial premises fell 8.8 percent quarter on quarter to 1.07 yuan per sq m in the first three months in Beijing, while logistics space rent dropped 7.4 percent to 0.875 yuan per sq m, DTZ found.
Although Beijing isn't really a production center, Ip of DTZ said that the capital was close to Hebei Province and three other provinces in northeast China. All these provinces are centers for both agriculture and industry, and many of their products go through Beijing.
Beijing's Capital International Airport is the country's largest, able to handle more than 55 million passengers and more than 1.1 million tonnes of cargo annually.
The declines in Beijing industrial rents showed the impact of the slowdown on these nearby provinces, analysts said.
High vacancies in Guangdong
Jones Lang Lasalle data showed that the average rents in Guangzhou's industrial parks declined 2.4 percent quarter on quarter in the first three months. It didn't provide a rental figure.
Chen said that to his knowledge, the export downturn had led to the closure of more than 50,000 factories in southeastern China, Guangdong Province in particular.
Local media have reported that there were more than 17 million sq m of vacant factory warehouses as of November just in Shenzhen, an export hub in Guangdong. That represented a vacancy rate of more than 20 percent, and rents were down 15 percent.
"Industrial property rents in the coming half, especially within the logistics sector, should continue to decline as conditions for import-and export-associated businesses will continue to deteriorate and occupier demand from manufacturing and logistics will continue to stagnate," DTZ said.
