RETAIL APRIL 2019 MARKETBEATS

3.78 ¥894.2 4.1% STOCK RENTAL VACANCY (MILLION SM) (RMB/SQM/MO) RATE

Economic Indicators Past 12-Month HIGHLIGHTS Q3 2018 Q4 2018 Growth 8.1% 7.6% Shenzhen’s prime retail stock remained at 3.78 million sq m for the quarter. Supported by GDP Growth malls’ solid sales performance, citywide average rent increased 2.8% q-o-q to RMB894.2 per Total Retail Sales Growth 8.2% 7.6% sq m per month in Q1. Despite the tenant mix adjustments underway at some projects and a CPI Growth 2.6% 2.8% Note: Growth figure is y-o-y growth seasonal slowdown, the vacancy rate remained flat at 4.1% on solid take-up. Source: Shenzhen Statistics Bureau In Futian, average rent rebounded to RMB1,005.6 per sq m per month, up 2.6% q-o-q, and Shenzhen Total Retail Sales of the vacancy rate tightened further to 6.4% at quarter’s end. This was helped by improved Consumer Goods 2,000 performance at UpperHills mall. Meanwhile, Coco Park added international labels Dior, Lancome and Givenchy, as well as new F&B including the South entry of Royal 1,000 Stacks and a new cafe by %Arabica Coffee.

Nanshan’s vacancy rate edged up to 4.3% as some retailers left older stores due to RMB 100 million 0

competition heated up in the area. Supported by the premium malls, average rent increased

2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 3.0% q-o-q to RMB865 per sq m per month for the quarter in Nanshan. 2014Q1 Source: Shenzhen Statistics Bureau Meanwhile, malls are busy adding a variety of amenities. Athletic facilities are in particular demand, such as yoga and boxing centers, and children’s-related stores continued to spring PRIME RETAIL SUPPLY PIPELINE up. In comparison to the last few years, there is some slowdown to F&B expansion in the 1,000,000

city, while several KOL-themed stores have closed. 800,000 m A Cushman & Wakefield 600,000 Research Publication sq Outlook 400,000 Ahead through the remainder of 2019, approximately 828,000 sq m of new prime retail 200,000 DATA INTO supply is scheduled to be delivered citywide, with half of the new malls slated for Futian and 0

ACTION Nanshan submarkets. New completions should cause further competition in the core areas.

2010 2003 2004 2006 2007 2008 2009 2011 2012 2013 2015 2016 2017 2018

2019F 2020F 2021F 2022F Meanwhile, emerging submarkets that enjoy a sizeable resident base, including Longhua Bao'an Futian Longgang Longhua Luohu Nanshan www.cushmanwakefield.com and Xili, are expected to grow further as new prime retail supply comes online this year. Note: F is for forecast Source: Cushman & Wakefield Research SHENZHEN RETAIL MARKETBEATS APRIL 2019

Zhang Xiao-duan Prime Average Retail Rents(Q1 2019) Senior Director, Head of Research South & West China SUBMARKET RMB/SQ M/MO EUR/SF/MO USD/SF/MO 12-Month Forecast Add: 18F, Tower2, Kerry Plaza, No.1 Zhongxinsi Road, , Luohu 1,683.3 20.5 23.3 Shenzhen 518048, China Tel: +86 755 2151 8116 Futian 1,005.6 12.2 13.9 [email protected] Nanshan 865.0 10.5 12.0

Longgang 484.0 5.9 6.7

Bao’an 637.5 7.8 8.8

Average Prime Retail Rent 894.2 10.9 12.4 Exchange Rage: 1RMB=0.149USD=0.131EURO as of 2019.2.21 *Average rents (RMB/sq m/mo) are based on ground floor in prime locations in major shopping centers, excluding management fee, promotional fee and other fees.

Significant Store Openings (2019 Q1)

PROPERTY SUBMARKET TENANT Business Type Nanshan See by Chloe Fashion COCO PARK Futian Dior F&B Poly Plaza Nanshan Carrefour Le Marché Supermarket

DATA KK ONE Futian Nike Kicks Lounge Apparel INTO ACTION SIGNIFICANT PROJECTS PLANNED & UNDER CONSTRUCTION PROPERTY SUBMARKET SQ M COMPLETION DATE A Cushman & Wakefield One Avenue Futian 186,000 2019 Research Publication Maxland Bao’an Center 160,000 2019 Baoneng All City Xili 132,000 2019 Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers Hongshan 6979 Longhua 100,000 2019 and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 51,000 employees in 400 offices The Mixc Qianhai 80,000 2020 and 70 countries. In 2018, the firm had revenue of $8.2 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter. www.cushmanwakefield.com

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