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1 Key Challenge for BHG Retail REIT

BHG Retail REIT (SGX: BMGU) is the first pure-play China retail real estate investment trust (REIT) listed in Singapore. The REIT’s portfolio currently comprises of five brick-and-mortar retail properties: Beijing Wanliu (60% stake), Chengdu KonggangHefei MengchengluXining Huayuan, and Dalian Jinsanjiao.

Recently, the Chief Executive Officer of the REIT’s manager, Chan Iz-Lynn, was interviewed by stock exchange operator, Singapore Exchange, under the “kopi-C: the Company brew” interview series. One of the topics of discussion was the changing demands of the Chinese consumers.

Let’s take a look three quotes from the interview about that topic:

1. “Many Chinese travel widely now, such as having visited Southeast Asia, and they want to be able to savour different kinds of cuisine, such as Thai food or chilli crab, in the malls. Social media provides them with information on the latest trends, so they want not just yoga, but aerial yoga!”

Chinese consumers are becoming more sophisticated as they learn about the different cultures and food from their travels. The rampant proliferation of social media has also made consumers more discerning. Patrons to the REIT’s malls are demanding more than before.

2. “Customers desire better and better products. They ask for imported brands because one, they can afford it, and two, they want the very best for themselves and their children.”

Furthermore, with growing affluence, consumers desire more and are willing to pay a premium for overseas brands.

3. “As an operator, we need to monitor and keep up with these shifts in demand.”

Therefore, due to the shifting consumer demands, the REIT has to constantly keep up with the trends or risk losing out.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.