The number of shopping malls in China is expected to climb to a historic high by the end of 2013 after the nation's retail business began slowing in late 2012, according to a report released by Jones Lang LaSalle.

China's retail business is in a transition, the report said. From late 2012 to early 2013, just two to three major malls in Shanghai and Beijing saw month on month sales increase while most malls in the two cities suffered decline.

The report expects China's retail sector to recover in the second half of 2013 as consumer sentiment improves on government policies aimed at spurring domestic consumption.

The overall lackluster market has raised the alert for retailers, prompting them to shift from strengthening their brands to maintaining a reasonable profit margin, said Deng Rushun, chief China commercial property analyst with Jones Lang LaSalle.

Healthier development of the retail sector is expected to be seen in the second half of 2013 and throughout 2014, Deng predicted.

Deng said Shanghai is comprehensively the strongest retail market in China, while Chengdu, Sichuan is the most potential market. He forecast supply of new retail space to total three million square meters in Shanghai and to total three to four million square meters in Chengdu during the next three years.

Deng also noted that a large amount of commercial real estate projects are being built in smaller cities like Jinan, Hefei, Kunming and Changzhou.

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