In 2013, the ranking of the best cities for commercial real estate was officially released. This report, jointly conducted by RET, Deloitte China, and Nanyang Polytechnic University in Singapore, analyzed the commercial property landscape across 40 major Chinese cities. The findings revealed a dynamic and evolving market with some unexpected results.
Shanghai claimed the top spot, followed closely by Beijing. Surprisingly, cities like Shenyang and Chengdu—once criticized for being potential "commercial real estate bubbles"—made it into the top quartile, signaling strong growth and resilience. Meanwhile, Xi'an, an ancient city, entered the top ten for the first time, highlighting the growing commercial potential of the northwest region.
The report also emphasized the increasing presence of luxury brands in key cities. Over the past five years, more than 1,750 high-end specialty stores and 780 fast-fashion chains have expanded into these cities. With a 30% annual growth rate in commercial real estate investment, the sector is booming.
Luxury retail showed a clear preference for top-tier cities, particularly Beijing, while cities in the Northeast—like Shenyang, Harbin, and Dalian—experienced a notable rise. In contrast, only two cities from the Yangtze River Delta made the list, despite their economic strength. Although luxury brand expansion has slowed in major cities, there's a growing trend of reaching out to smaller cities.
Fast fashion brands, on the other hand, saw a different pattern. Guangzhou, a first-tier city, surprisingly missed the top ten, while second- and third-tier cities welcomed a surge in fast-fashion store openings. These brands are quickly establishing "sub-main store branches" within shopping centers, challenging traditional department stores. According to Zhang Jiapeng from RET, this shift reflects a growing overlap between consumer segments who value style over price.
In terms of developer and retailer preferences, cities like Chengdu, Tianjin, Dalian, and Wuhan were highly sought after in the "1.5-line cities," while Harbin and Nanchang led in second- and third-tier markets. These cities showed stronger commercial vitality and higher consumer demand compared to others of similar status.
Looking at future development potential, cities such as Nanjing, Jinan, Wuxi, Qingdao, and Hohhot still have significant room for growth, as retail brands haven't fully entered yet. On the other hand, Chongqing, Hefei, Xi'an, Ningbo, and Dalian already host a large number of retail brands, indicating strong commercial momentum.
Cities once labeled as having inflated commercial real estate—such as Shenyang, Chengdu, Tianjin, and Wuhan—have proven to be well-aligned with their economic development. They even outperformed first-tier cities like Guangzhou and Shenzhen in the rankings.
Shanghai and Beijing, leading the pack, are considered to be in the advanced stage of commercial real estate development. As population and economic growth continue, cities like Shenyang, Shenzhen, and Hangzhou are following suit.
The report also examined the evolution of commercial spaces, noting that new shopping malls are shifting away from purely retail-focused models. Emerging business districts rely more on food, entertainment, and lifestyle offerings to attract customers, resulting in a lower proportion of retail space.
Five major trends are expected to shape the future of commercial real estate: the rise of secondary flagship stores, the transformation of high-end dining, the rapid growth of mid-range dining, the expansion of children’s themed businesses, and the emergence of experiential leisure and entertainment sectors. Cross-border integration and thematic development will become increasingly important.
As Zhang Jiapeng stated, “The future of commercial real estate will be all about themes and specialization, no longer just about supply.†He added that the focus will shift from mere shopping to a more immersive consumer experience.
This insight into the 2013 commercial real estate landscape offers a glimpse into the evolving dynamics of China’s retail and real estate sectors.
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