Shanghai, Beijing and Hangzhou currently offer the brightest prospects for retail real estate investors, a research from commercial property management and investment consultancy CBRE showed on Thursday.

According to the report, which analyzes retail property investment opportunities in 17 major cities in the country, Shanghai, Beijing and Hangzhou rank highest while Chengdu rounds up the top four positions. CBRE said investors must exercise caution when considering opportunities in China's second-tier cities, such as Shenyang and Wuxi.

Shenyang is the largest retail market in Northeast China. The city has an abundance of department stores and shopping centers, and the overall retail vacancy rate stood at a relatively high 19.1 percent as of the second quarter of 2014.

Shenzhen is the only first-tier city that failed to break into top four ranking on CBRE's MarketScore index, coming in at sixth.

This is surprising given that city residents have the highest average disposable income among major cities in China, and that their consumption power is likewise among the highest in the nation. However, a significant portion of consumption by city residents -- high-end consumption in particular -- takes place in Hong Kong. Moreover, Shenzhen currently has the second highest amount of retail space per capita among major cities in China, with two times more space per capita than Shanghai or Hangzhou.

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