A wave of optimism is washing over Asia's retail sector, fueled by resurgent post-pandemic spending and a return of tourism. A recent whitepaper by global real estate investment manager Hines called "Retail's Next Act" highlights this trend, noting that key cities like Tokyo, Seoul, and major Australian markets have seen a surge in retail sales driven by tourist spending.
By Darren Cartlidge, Principal / Regional Leader - Asia, Hassell
Beyond the immediate recovery, the report reveals promising long-term indicators for Asian retail. With constrained supply prompting a recalibration of brick-and-mortar stores in response to e-commerce growth, retail spaces are adapting to meet evolving consumer demands. This adaptation, coupled with low vacancy rates and positive global economic trends like rising wages and strong consumer demand, is creating a fertile ground for continued growth in retail consumption.
Looking towards the future of Asian retail, the region's unique strengths become even more apparent. Asia Pacific is poised for significant economic expansion, with real GDP growth forecast to reach 4.0% in 2024, a significant leap compared to the projected growth rates of the United States and Eurozone. This economic upswing is further bolstered by the recent relaxation of visa restrictions in key markets such as Thailand, Malaysia, and Singapore, which have already witnessed Chinese tourist spending surpass 2019 peak levels by 7.5%.
Harbourside Redevelopment by Snøhetta and Hassell, Sydney, Australia – image by Snøhetta+Hassell
These trends, combined with Asia's position as a global leader in experiential and immersive retail design, paint a vibrant picture for the next chapter of retail in the region. Here, retail developments are social spaces, lifestyle hubs and places that are created for all-ages community interaction.
For over 25 years, Asia has been the launchpad for hundreds of new and exciting retail offerings that tantalise and excite the senses, encouraging patrons to spend their time and money. But now, in this post-Covid era, retail is needing to reinvent itself amid a new set of dynamic challenges.
Ageing retail assets in Asia
Across Asia, there are hundreds of retail assets built over the last 25 years which are at or approaching their end of life. They’re in desperate need of repositioning to turn them into high-performing assets once again.
Despite an ever-growing number of people shopping online, we all still crave social interaction and are always looking for places where to go with our family and friends. We look for environments that are safe and can provide enjoyment for all ages. So, it’s not an either/or situation – physical lifestyle hubs and destinations that have retail as part of their overall offer will remain important places for people to spend their time in the decades to come.
In Asia, where family and community interaction are deeply ingrained in local culture, retail developments play a vital role as social hubs. This cultural emphasis on togetherness will continue to drive foot traffic to retail spaces. As China's National Bureau of Statistics reported, service sector consumption surged by 20% in 2023, outpacing commodity retail sales growth of 6%. This trend highlights the growing importance of experiential retail experiences, as evidenced by the popularity of concept stores, pop-ups, and co-branding initiatives.
To meet this evolving consumer demand, retailers are adapting by occupying less traditional shopping areas and exploring unconventional spaces like cultural heritage projects and open-air retail formats in urban neighborhoods and community centres. This shift reflects a strategic response to the changing dynamics of retail consumption, where lifestyle elements are becoming increasingly integrated into in-store experiences.
So, what can owners of retail developments do to ensure that they are well-positioned for the next chapter of consumer wants and needs? Below I’ll explore a few strategies that we are using at Hassell.
Integrated spaces
Park Avenue Central (PAC), Shanghai, China - image by Bloom Images
Retail developments that integrate their interior and exterior spaces are more likely to be successful: they’re an extension of the neighbourhood and part of the community, rather than a separate entity. By blurring the boundaries between interior and exterior spaces, these developments can all find a new vibrancy and intimacy - street retail, public plazas and rooftops start to feel like a cohesive whole with the indoor spaces.
Blending retail, residential, workplace and hospitality spaces together with seamless transport links is also a key strategy for creating a development that has enough drawcards to keep people coming back. From a third working place to the social allure of a galleria café, or the late-night energy of casual dining, consumers yearn for a more fluid and integrated experience. We all seek diverse and engaging physical spaces for a deeper emotional connection and a holistic approach to integration ensures all touchpoints resonate with evolving consumer preferences.
Reimaged spaces
K11 Art Mall, Wuhan, China - photography by Dirk Weiblen
Our team have worked on redeveloping and reimagining numerous retail spaces – ranging from renovation through to a fundamental rethink of how an asset could perform to its full potential.
Situated on Yongyuan Road in Shanghai near Jing'an Temple, the Creater project seeks to reconnect a disengaged site with the city’s vibrant urban fabric. We used a community-driven and sustainable-focused approach when reimagining the development, finding a new 'link' that connects the development’s three buildings. Two of the side buildings were transformed from serviced apartments and a retail mall to a commercial workplace function, while the middle building has been turned into a fully high-end retail building. These three buildings are connected via retail offerings on the ground and basement levels.
Yongyuan Road Redevelopment, Shanghai, China - image by Frontop
Research-driven and experiential approaches
At Hassell, we have access to two partner companies that drive great outcomes for our clients, especially in the retail sector. Place Intelligence provide access to big data with location insights, predictive data models and leading spatial analysis software. In retail spaces, this means the ability to analyse footfall not only within a development, but also its wider location and context.
Freestate are champions of an ‘integrated thinking’ and ‘experience-led’ approach to effecting change. In retail projects, this can mean anything from reimagining the visitor experience to a mall, to redefining a client brief to put people and experiences front and centre of the design, through to activation of a space after it has opened.
Melbourne Airport T1, Melbourne, Australia – photography by Earl Carter
Melbourne Airport serves as a prime example of Hassell’s collaboration with FreeState. We partnered with them to conduct a comprehensive audit of the traveller experience, identifying areas for improvement. This led to the development of a precinct-wide visionary masterplan, encompassing the overhaul of the new international terminal, airport operating system, and a staff and supplier training toolkit. Together, these initiatives aim to deliver a seamless 'door-to-plane' experience in various stages.
Sustainability and cost savings
Uni Vanke Mall, Shanghai, China - photography by Hinok Cai, Hassell
Designing sustainably is deeply ingrained within Hassell’s DNA and we actively seek out opportunities to reduce or negate a landlord’s operation and maintenance costs. As consumers increasingly desire leisurely social experiences and open-air environments in retail developments, the reliance on air-conditioned spaces, common in conventional retail, is diminishing. By embracing natural elements like sunlight, shadow, air, and breezes, retailers can create more inviting and sustainable environments that engage dynamically with their surrounding environment.
Uni Vanke Mall, Shanghai, China - photography by Hinok Cai, Hassell
While a single project cannot solve all environmental challenges, even small adaptations can contribute to a more sustainable future. These efforts resonate with the growing number of middle-class and younger consumers who seek to enjoy life with minimal environmental impact and even incremental benefits to nature. Moreover, as mall traffic recovers to pre-pandemic levels, revitalising zombie malls becomes crucial for long-term retail sustainability. Given the rapid pace of consumer trend changes, it's often more practical to repurpose existing malls rather than building new ones to accommodate every emerging preference.
In conclusion, despite the challenging economic climate, investing in experience-driven retail placemaking remains a strategic opportunity to foster customer loyalty and drive long-term returns. As the global middle class becomes increasingly Asian, retailers have a unique opportunity to engage with this growing demographic. Research indicates that consumers are seeking deeper connections with brands, making adaptable spaces that accommodate diverse brands and retail segments essential for creating compelling experiences both online and in-person.
We’d love to hear your thoughts in the comments on what the future of retail will look like, and if you would like to hear more about Hassell’s research in this space, please reach out.
CONTACT US
Isabel Tang
Media Relations
T +86 21 5456 3516
E itang@hassellstudio.com
Thomas Xu
Business Development Leader
T +86 21 5456 3525
E TXu@hassellstudio.com
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