The rents and prices of retail property will rise by double digits this year in major Chinese cities due to rosy growth prospects in the country's retail sector, according to a latest real estate industry report.
Investors moving into this segment of the market because government curbs on housing are likely to remain are also fueling the increase in rents and prices, an analyst said.
In 2012, Shanghai is expected to post the highest growth in retail property prices and rents, which will also continue to rise in Beijing, Guangzhou and Hangzhou, according to the report released yesterday by Knight Frank and Beijing Holdways Information & Technology Co.
The report also studied Shenzhen, Tianjin and Chengdu.
"The tightening measures to rein in housing speculation since 2011, which are unlikely to be relaxed this year, have been prompting investors to shift to the retail property sector that is expected to outperform the office and residential segments," said Thomas Lam, head of China research at Knight Frank.
China Vanke and Poly Real Estate Group, the nation's two largest listed developers, are among those who have raised their investment in the retail property sector, according to the report.
Meanwhile, several international retailers eager to tap the strong purchasing power of consumers in first and second-tier cities on China's mainland are rushing to expand and bolstering a rosy future for the retail property market.