Hot links: The week’s Asia Pacific retail real estate news
Publish Date: August 21, 2014
Here's a roundup of what regional news organizations in Asia and Australia are reporting about the local retail real estate business.
• More malls adding apartments, hotels — The Sydney Morning Herald GPT Group plans to start developing the air rights above its malls. Its first will be Melbourne Central.
• Open-air centres upgrade to compete with malls — The Sydney Morning Herald In an effort to compete with Westfield and other mall giants in Australia, the owners of open-air centres are undertaking major upgrades.
• South Korea's high-street retail a hit — The Korea Herald Unlike other countries in Asia that are dominated by mall retail, high streets across South Korea, even outside of Seoul, are attracting international chains and tourists alike.
• Grocers power Charter Hall's strong fiscal year — The Sydney Morning Herald Grocery-anchored centres helped Charter Hall Retail REIT achieve strong fiscal year financial results. The Sydney-based firm posted a 62 percent rise in net profit for the year ended June 30, hitting A$85.2 million [$75.9 million]. The REIT is looking at adding about A$100 million of additional centres to its portfolio.
• Woolworths CEO says David Jones not going downscale — The Sydney Morning Herald Woolworths is not turning upscale department-store chain David Jones into another Marks & Spencer, or a Target, says chief executive Ian Moir. (Woolworths recently acquired David Jones for A$2.2 billion [$2.1 billion].) However, some private-label brands might be introduced to replace some of David Jones' under performing goods.
• Lotte Shopping selling stores for $591M — The Korea Herald South Korea-based Lotte Shopping is selling some stores to KB Asset Management, of Seoul, for 602-billion won [$591 million] in efforts to improve the company's liquidity. Two department stores and five discount assets are involved in the deal, which Lotte will lease from KB. Lotte operates about 1,400 stores under different formats.
• Filipino lawmaker makes foreign retail-ownership push — Philippine Daily Inquirer A Filipino lawmaker has filed a bill in the country's House that would allow a foreign company to fully own a business in The Philippines. If passed, the new bill would allow a foreign business to own a store if it invests between $2.5 million and $7.5 million in the enterprise. For luxury products, an entity need invest $250,000 per store.
• Former Australia treasurer backs major retailers — The Sydney Morning Herald Peter Costello, Australia's former federal treasurer, argued at an industry event that competition laws should not be put in place that would restrict the growth of major retailers, specifically grocers. Such a move could impact the price of goods unfavourably for consumers and assist inefficient chains, he argued.
• Retailers major asset owners in Seoul's Gangnam district — Yonhap News Agency Two of the three largest owners of real estate in Seoul's three wealthy districts, Gangnam, Seocho and Songpa, are retail companies. Lotte Group owns 9.5-trillion won [$9.3 billion] of assets, including the 123-story tower it is building in Songpa. Sinsegae Group came in third, with properties valued at 3.57 trillion won.
• U.K.-based retailers make push in China — Retail Gazette Britain-based retailers are expanding into markets throughout China due to the growth of exports in that country and data that shows strong spending by Chinese consumers during trips to the United Kingdom. Among another wave of retailer entering the market include Arcadia Group's Topshop and Miss Selfridge.
• Myanmar ready for retail — Democratic Voice of Burma Myanmar lacks the economic output of many of its neighbors, but consumers there are slowly ready to be serviced by retailers. Part of the problem the retail industry faces is a lack of manufacturing in the country. As of now, most goods are imported from China, India and Thailand. Additionally, though GDP is growing, it is at a slow pace.
• Minimarts grab food market share in Manila — The Malay Mail Annual sales growth at Philippine Seven Corp., the owner of 7-Eleven stores in the country, rose an average of 22 percent in the last five years, in part due to strong food sales as some diners opt for their offerings instead of fast-food chains. There are now 1,600 Philippines convenience stores, a number that may increase tenfold by 2030.
• Sri Lanka trade mission to Thailand features retail — The Nation Retail will play a significant role in trade missions to Thailand next month by business officials from Sri Lanka. Executives from Sri Lanka-based food chain Cargills Food City, the largest retailer in that country, will make a visit on Sept. 9 to discuss agriculture and other topics with Thai business leaders.
• Wowprime considers U.S. JV with Panda Express — Taipei Times Taiwan-based Wowprime Group is prepared to launch its Yakiyan barbecue chain in the United States in a joint-venture agreement with Panda Group, which runs the Panda Express chain. Wowprime, which operates 24 Yakiyans in Taiwan, will start its efforts on the U.S. West Coast. In all, Wowprime operates 396 outlets in China and Taiwan.
• KFC franchisee in Australia posts strong Q1 — The Sydney Morning Herald Collins Foods, the largest KFC franchisee in Australia with 169 units, reported a 20 percent increase in earnings for its fiscal first quarter, hitting A8.5 million [$7.9 million]. Same-period sales for the chain also increased three percent.
• Lenovo leads China smartphone sales — WantChina Times Lenovo Group Limited, which has plans for about 300 retail outlets that exclusively sells its products in China over the next couple of years, is now the largest supplier of smartphones in the country. The company reported a 20-percent rise in its shipments of smartphones to China, surpassing Samsung.
• Aussies to open their wallets for Father's Day — The Sydney Morning Herald Australians are expected to spend A$761 million [$704 million] on Father's Day gifts this year, a three-percent increase from 2013, according to research firm IBISWorld. The average dad should get $51.60 on gifts, led by food and beverage, tools, hardware and electronics.
• MGM casino may replace famous Tokyo fish market — Bloomberg MGM might build a casino on the site of the Tsukiji fish market, which sells 420 billion yen [$4.1 billion] of seafood annually and is a major tourist draw in Tokyo, attracting 42,000 visitors a day. The market, which is laid out on a 231,000-square-metre parcel, is slated to move in 2016 following a 2001 decision by the government to relocate it.
• Kyoto looks to duty free for tourism boost — The Asahi Shimbun The City of Kyoto is expanding its number of duty free shops in the locale in efforts to increase tourism. Japan's national government put a measure in place, to start in the fall, increasing the different kinds of goods that are allowed for sale by duty free vendors. Food and cosmetics are among the new items that stores will be able to sell.
• Hong Kong a leader in upscale-sneaker fashion — South China Morning Post Three Hong Kong-based brands, Cipher, Clot and Gram, are among the global leaders in high-end sneakers, collaborating with the likes of Nike and other mega-shoe manufacturers. Luxury designer-athletic shoes are gaining popularity internationally, and can retail between $500 and $800 per pair.
• Auckland airport retail RFP attracts several bidders — The Moodie Report A request for proposals put forward by the management of the Auckland Airport in New Zealand to attract new duty free and food and beverage operators in the facility has attracted 10 interested firms. Among them are incumbent duel operators DFS Group and JR/Duty Free. New concessions are scheduled to open in July 2015.