Rising inflationary pressures may soon start to pinch Asia Pacific shoppers and retailers, CBRE warns. In its Asia Pacific Retail Trends Q1 2026 report, the firm notes that while higher consumer prices have not yet shown up in sales data, they loom as a risk.
“While not yet evident, rising inflation may impact consumption in the months ahead. Should the conflict
persist, elevated oil prices will weigh on retailers’ production and logistics costs. Retailers are now
turning more cautious toward site selection, primarily focusing on prime high street location,” Vivek Kaul CBRE Head of Retail Leasing Asia said.
The report finds that in anticipation of a tougher trading environment, retailers are already adjusting their strategies by focusing expansion on proven, high-footfall locations.
The survey highlights examples across APAC. In Vietnam, for example, consumer sentiment has begun shifting from cost-cutting toward cautious spending, but CBRE notes that “rising inflation and increasing oil prices could pose headwinds” in coming months.
Retailers in congested CBD markets are constrained by limited new supply, and many are now eyeing stand-alone stores on busy streets as safe bets. Top tier cities in China, demand remains strong in core shopping districts, but rents are already under pressure from competition.
While Korea continues to witness market polarisation amid strong inbound demand and flat domestic consumption. This is leading to tourist-oriented areas such as Myeong-dong, Gangnam and Hongdae. outperforming but other locations reporting higher vacancy.
Overall, CBRE’s data suggest a bifurcation: prime malls and high-street corridors are holding up well, while lower-tier urban and suburban centers face softening demand.
CBRE ultimately remains cautiously optimistic, forecasting that retail leasing will exceed 2025 levels across APAC for the full year, thanks to improving sales and tourism.
The report underscores the need for landlords and retailers to adapt. Landlords with flexible, experiential formats (like dining, wellness and services) and the ability to remix tenants stand to fare best. But in the near term, many retailers will double down on their best sites as a hedge, a shift CBRE says could further accentuate the gap between trophy high streets and secondary locations.
