Southeast Asia's Going Shopping; More Retail Construction Required

Asian and non-Asian international real estate investors alike are providing capital to develop the growing retail sectors in Southeast Asia and China. In fact, coming off a strong 2004, the retail sector remains one of the most attractive property types in Southeast Asia, with buoyant consumer confidence?and active tourism in Hong Kong, Singapore and Bangkok?expected to help retailers post another strong year of sales.

Retail properties are performing very well in Malaysia, Thailand, Singapore, Hong Kong and even Indonesia, where people are looking to buy goods, according to Richard Price, a managing director at ING/Clarion. He said the British are the dominant investors, and there is also local investment and development. China, meanwhile, is more open to international retailers, which include, but are not limited to, Carrefour, the French and British distributor, primarily involved in food retailing; Tesco, the British supermarket chain; Wal-Mart; and Tesco Lotus, the leading retailer of consumer goods in Thailand.

And yet there still appears to be significantly more room for growth in these markets. "The biggest obstacle is a lack of information for investment decisions," said Price. "Then there is a lack of high-quality retail buildings. (But) some retailers, such as IKEA, have been aggressive in developing big- box facilities in these countries."