Beijing retail outlook 2026 hinges on consumer confidence recovery

Retail recovery remains linked to broader economic conditions.

The outlook for Beijing’s retail market in 2026 is centered on whether consumer confidence can recover, following a weak 2025 marked by declining sales and falling rents, according to JLL’s Asia Pacific Retail Market Dynamics Report.

Total retail sales of consumer goods dropped 3.1% year-to-date in 2025, prompting brands to pull back on expansion and increasing pressure on traditional retail sectors through higher store closures and lease surrenders.

Fast food, IP-driven retail, ACG (animation, comics, and games), and outdoor apparel continued to attract strong traffic, reflecting a shift toward experience-based and emotional consumption amid tighter household budgets.

On the supply side, new retail space exceeded 800,000 sqm in 2025—below 2024 levels but still slightly above the 2022–2023 average—signaling a more disciplined development pipeline.

Deliveries slowed sharply in the second half of the year and were largely concentrated in suburban districts, helping ease pressure on urban vacancy absorption.

Meanwhile, urban net effective rents fell 2.5% quarter-on-quarter by end-2025, bringing the annual decline to 9.5%, whilst yields continued to soften as competition intensified and tenant budgets tightened.

The report said that the market recovery in 2026 is expected to depend primarily on macroeconomic stabilisation and improving household income expectations.

Prime retail assets with strong locations and active asset management are already showing relative resilience, supported by ongoing tenant mix upgrades and brand repositioning, it noted.