Tokyo named world’s “hottest” retail market

London - Japan’s capital Tokyo has been named the world’s “hottest” city for retail expansion, according to the latest CBRE report, ‘How Global is the Business of Retail?’.

The report, which tracks the target markets of new brands in 164 cities in 50 countries, found that Tokyo was the most popular after it attracted 63 new brands last year and that space in core areas of the Japanese capital remained highly sought after, despite mixed signals in the economy and an increase in the sales tax to eight percent in April 2014.

Singapore followed Tokyo with 58 new retail brands, while Abu Dhabi came in third with the arrival of 55 new retail brands. In Europe, Moscow came out on top with 41 new retail brands, closely followed by Paris with 40, while Berlin came in third with 29. Toronto stood out as the hottest market in the Americas, attracting 25 new international brands in 2014.

The research also revealed that US retailers are the most active when it comes to expanding into new global markets, in 2014, US retailers accounted for 26 percent of cross-border expansion, with Asia being the primary target, followed by Europe, the Middle East and then Africa.

Italian retailers were the second most active, accounting for 14 percent of cross-border expansion, followed by UK based retailers with 11 percent and French retailers at 10 percent. Globally, Europe accounted for 42 percent of retailer expansion, followed by Asia with 39 percent and the Middle East and Africa with 10 percent. North America was only a target for three percent of retailers.

Japan’s capital is world’s “hottest” city for retail expansion

“The core elements of globalisation, technology and demographic change, continue to have a dramatic impact on the business of retail. Demographic shifts in many countries have resulted in changes in both spending power and shopping habits. Technology enables retailers to enter markets and evaluate performance more swiftly,” said Brandon Famous, senior managing director, retail occupier advisory and transaction services, CBRE. “Consumer travelling patterns mean that many brands are well known before they even enter a market and the pent-up demand for the chance to purchase locally creates a ready-made market before entry.”

Mid-range fashion retailers remained the most active sector accounting for 21 percent of global expansion, followed by luxury and business retailers with 20 percent, and specialist clothing with 16 percent.

Famous added: “Consumers continue to view the physical store as their preferred mode of purchase and perhaps more importantly, as a point of social interaction.

“Consumers view shopping as a leisure activity and the continued expansion of brands and the development/improvement of shopping locations gives them the opportunity to embrace this.”

Images: Matsuya Ginza in Tokyo and CBRE