Experience-oriented retailers drive leasing activity

Some brands are engaging customers through various marketing campaigns like pop-ups, exhibitions, and co-branded activities.

Leasing activity in the retail sector is mainly driven by experience-oriented retailers, particularly in food and beverage.

According to Savill’s Asia Pacific Retail report, cafés and casual dining are the fastest-growing segments in the F&B sector.

"We have observed an increasing number of Chinese F&B brands, such as Cotti Coffee and Luckin Coffee, actively expanding their presence in Southeast Asian markets for example," the report said.

Athleisure wear and cosmetics retailers are also thriving due to health trends and tourist spending, whilst jewellery and watch retailers focus on streamlining their store networks.

Meanwhile, luxury retailers are focusing on consolidating their store networks rather than aggressive expansion. Many luxury brands are shifting their attention towards building concept stores and exploring opportunities for pop-up stores. These expansions are typically limited and occur in selective markets such as South Korea, Taiwan, and Malaysia.

Moreover, brands are also prioritising comprehensive customer experiences through initiatives like pop-ups, exhibitions, and co-branded activities. Fendi previously collaborated with HeyTea to launch a co-branded drink in Beijing, expanding the brand's reach and strengthening customer connections.

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Luxury brands are also integrating lifestyle elements into stores as seen in examples like the Richard Mille flagship store in Singapore, which includes a restaurant, bar, sports room, watchmaking counter, and a hidden library.

Additionally, retailers are exploring unconventional store formats and locations to attract younger consumers. Many are now opting for spaces in less traditional shopping areas or unconventional venues like cultural heritage projects.

"These stores also serve to increase social media engagement among consumers, promoting both physical sales and online exposure at the same time," the report noted.