China Property Management & Services: March Mall Growth Slowed as Expected
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Leading Chinese mall operators recorded mid-single-digit same-store sales growth (SSSG) in March 2026, aligning with expectations as the base effect normalized following the Spring Festival. Luxury malls continued to outperform non-luxury counterparts. Adjusted offline retail sales, excluding autos, accelerated to 3.5% year-over-year growth in March, up from 1.6% in the first two months. Conversely, broader social retail sales growth slowed to 1.7%.
Morgan Stanley anticipates stable growth for leading mall operators in the second quarter, driven by ongoing market consolidation amid sector polarization. The firm reiterates its preference for China Resources Mixc Lifestyle (1209.HK), citing its robust market consolidation capabilities and a supportive 4-5% dividend yield.
Among key operators, China Resources Land (1109.HK) reported an 11% rental increase in March, with first-quarter rental growth reaching 14%. Longfor Group (0960.HK) saw flat rental growth for the month, impacted by ongoing asset renovations, though it maintained high-single-digit SSSG. Seazen (1030.HK) registered 3% rental growth for both March and the first quarter. Morgan Stanley expects leading operators to capture accelerated market share as Tier 1 cities outperform lower-tier markets.