Savills Report: Chongqing's Luxury Retail and Office Markets Strong in H1 2024

Chongqing - According to a Savills report released on July 15, Southwest China's Chongqing Municipality exhibited significant trends in luxury retail and office markets in the first half of 2024.

Far Eastern City in Jiangbei District, Chongqing, is a large-scale commercial complex that integrates shopping, dining, entertainment, and office spaces. (Photo/Far Eastern City)

Prestigious brands such as France's Biologique Recherche, Spain's LOEWE, the U.S.'s LA MER, and Sweden's BYREDO have launched in MixC Chongqing. Additionally, brands like Dior and Maison Margiela have opened standalone stores, leveraging the city's substantial consumer potential.

In the first half of 2024, Chongqing saw major retail developments with the introduction of the Far Eastern City shopping center, CapitaMall Skyview, and Yunlin Paradise Walk. The total quality retail space reached approximately 8.076 million square meters. Notably, Far Eastern City connects shopping and leisure to a park, creating a vibrant urban shopping hub.

The total quality retail space reached about 8.076 million square meters. (Graphic/Zheng Ran)

Interestingly, the animation, comics, and games (ACG) niche market has experienced rapid growth fueled by consumer interest in youth culture. Fangyuan Live Mall targets young consumers with ACG-related brands and events, revitalizing the project with fresh consumer engagement. Pavilion E of Longfor Times Paradise Walk has adopted ACG themes, introducing brands like Mancool that appeal to young consumers' tastes in garage kits, apparel, and makeup.

Urban renewal initiatives have boosted consumption in Chongqing, a city with a rich industrial heritage. Projects such as Minzhu Village and Taping Community have been transformed into cultural and tourism hotspots. Minzhu Village combines tradition with modernity, attracting niche retailers and boosting local commerce. Taping Community has attracted over 50 brands, enhancing retail synergy with nearby commercial zones and further invigorating Chongqing’s consumer market.

Urban renewal has transformed the Taping Community in Jiangbei District into a vibrant hub for cultural and creative consumption. (Photo/Beicang Li)

Two new Grade A projects in the office real estate sector have added approximately 235,000 square meters to the market: the International Metropolis near Shi Kong Place Chongqing and Junhao ICFC Block A in the Jiangbeizui Central Business District.

However, a significant new supply has raised the vacancy rate to 34.9%, with average rents dropping 1.4% to 79.5 yuan (about USD 11) per square meter per month. Demand is growing, especially from the professional services and financial sectors, which account for 20.1% and 15.2% of new leases, respectively.

The IT industry has seen the largest growth in demand, driven by government support for technological innovation. Dai Hui, head of Savills West China Agency Department, stated, "Recent government policies aimed at the high-quality development of the information industry and the advancement of Digital Chongqing have bolstered office leasing demand in related sectors, contributing to the city's modernization efforts."

The warehousing and logistics sector is recovering, driven by demand from snack and household furniture retailers. "The scarcity of storage in the city center, combined with the rental benefits of peripheral areas, has driven some businesses to relocate to high-standard warehouses on the outskirts," explained Chen Wenqing, assistant director of industrial and logistics real estate department of Savills West China.

Chen added that the local automotive industry, especially new energy vehicles, is thriving. From January to May, 997,000 units were produced, boosting related industries and potentially increasing leasing demand in new manufacturing clusters.