In 2013, the top cities for commercial real estate were officially ranked in a comprehensive report released by RET, Deloitte China, and Nanyang Polytechnic University. The study titled "Commercial Property 40 Cities in China" highlighted Shanghai as the leading city, followed closely by Beijing. Surprisingly, Shenyang and Chengdu, which had previously faced criticism over commercial real estate "bubbles," made it into the top quartile, signaling strong growth and maturity in their markets.
Xi’an, an ancient city, also entered the top ten for the first time, showcasing the growing potential of the northwest region. Luxury retail brands dominated the rankings, with Beijing being the most favored city for high-end stores. Meanwhile, cities in the northeast—Shenyang, Harbin, and Dalian—showed significant progress, securing three spots in the top ten. In contrast, only two cities from the Yangtze River Delta, known for their wealth, managed to make the list. Despite a slowdown in luxury retail growth, brand expansion into lower-tier cities is accelerating.
Fast fashion brands also saw a shift in focus, with Guangzhou, a major first-tier city, surprisingly missing the top ten. Instead, second- and third-tier cities experienced a surge in fast-fashion store openings. These brands are rapidly setting up "sub-main branch" locations within shopping centers, gradually taking market share from traditional department stores. According to Zhang Jiapeng, executive director at RET, this trend reflects a strong overlap in customer preferences, with consumers seeking affordable, trendy options.
Cities like Chengdu, Tianjin, Dalian, and Wuhan have become popular destinations for developers and retailers in the "1.5-line cities." Meanwhile, Harbin and Nanchang lead in second- and third-tier cities, showing stronger commercial vitality and consumer demand compared to their peers.
Looking ahead, cities such as Nanjing, Jinan, Wuxi, Qingdao, and Hohhot have significant untapped potential. Although their economic indicators are promising, they still lack large-scale retail presence, offering plenty of room for growth. On the other hand, Chongqing, Hefei, Xi’an, Ningbo, and Dalian already host numerous retail brands, driving their commercial development forward.
Shenyang, Chengdu, Tianjin, and Wuhan, once considered to be riddled with commercial real estate bubbles, now show a strong match between economic development and retail investment. In fact, both cities outperformed first-tier cities like Guangzhou and Shenzhen in the rankings.
Shanghai and Beijing, ranked first and second respectively, are seen as reaching an advanced stage in commercial real estate. With continuous population and economic growth, cities like Shenyang, Shenzhen, and Hangzhou are following suit.
The report also analyzed trends in commercial industry transformation, highlighting that new shopping malls are shifting toward a mix of retail and non-retail sectors. Traditional business districts still rely heavily on retail, while emerging areas depend more on food, entertainment, and experiential formats to attract customers.
Five key trends are expected in the future: the rise of secondary stores, the evolution of dining experiences, the growth of children’s themed businesses, the expansion of leisure and entertainment, and the emergence of innovative, cross-border integrated industries.
Zhang Jiapeng emphasized that the future of commercial real estate will be driven by themes and specialization, moving away from mass supply. He added that the focus will increasingly be on the overall consumer experience rather than just shopping.
This was the latest insight into commercial real estate brought to you by Xiao Bian.
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