Retail rents continue to rise in world’s most expensive shopping streets
Hong Kong’s Causeway Bay named as most expensive destination in 25th anniversary edition of Cushman & Wakefield’s flagship retail report
Hong Kong’s Causeway Bay remains the world’s costliest retail location for the second year running and breaks through the $3,000 per sq ft barrier for the first time in the survey’s 25-year history.
New York’s Fifth Avenue and Avenue des Champs-Élysées in Paris, which saw nearly a 40% rental rise, hold on to second and third place respectively.
With continued demand from international luxury brands, rents in London’s New Bond Street increased by more than 15% as the location climbed from sixth to become the fourth most expensive shopping street in the world.
Global retail rents remain resilient overall with a 3.2% average increase recorded for prime locations.
The Americas showed the strongest regional growth with prime rents increasing by 5.8%.
Hong Kong’s Causeway Bay remains the world’s most expensive retail location for the second year running, according to global real estate consultant Cushman & Wakefield’s flagship retail research report Main Streets Across the World, published today.
Celebrating its 25th year, the report is widely recognised as the barometer for the global retail market and ranks the most expensive locations in the top 334 shopping destinations across 64 countries.
Cushman & Wakefield is at the centre of global retail and monitors and analyses the evolution of the industry and global retail trends to ensure its clients are best positioned to capitalise on future developments in the sector.
Although global retail rental growth, at 3.2%, was slightly tempered when compared to the previous 12 months (4.5%), rental values in 285 of the locations surveyed for the report (85%) were either stable or rose.
Fuelled by competition between both high-end and non-luxury retailers for limited space, Causeway Bay experienced a 14.7% growth in rental values and broke through the $3,000 per sq ft barrier for the first time in the survey’s history ($3,017 per sq ft).
After being toppled from pole position for the first time in 11 years by Causeway Bay in 2011/2012, Fifth Avenue in New York saw rental values remain static but still held onto second place in the ranking with $2,500 per sq ft – and this was almost $900 per sq ft ahead of its nearest rival: Paris’ Avenue des Champs-Élysées, which placed third with $1,601 per sq ft. However, the French location extended its lead over other locations significantly by recording 38.5% growth, the third strongest rental rise globally.
With continued demand from international luxury brands, rents in London’s New Bond Street increased by 15.6% to $1,047 per sq ft as the location jumped from sixth to become the fourth most expensive shopping street in the world, replacing Ginza ($984 per sq ft) in Tokyo which moves down into fifth place this year. The other highest climber in the ranking’s top ten was Via Montenapoleone in Milan ($906 per sq ft) which witnessed a 7.4% rise in retail rents and moved up the table from eighth to sixth.
Cushman & Wakefield’s global head of retail, John Strachan, said: “Once again, we have seen Fifth Avenue and Causeway Bay retain their titles as the most expensive retail locations in the world. But we have also seen positive growth across almost all of the top global cities as international brands continue to compete for premier positions in the world’s most highly sought after shopping streets.”
Martin Mahmuti, a senior analyst in Cushman & Wakefield’s European Research Group, said: “Economic risks remain for 2014 but conditions are expected to steadily improve across most markets. The retailers’ push towards the best and most sought-after locations will continue; however, limited supply and higher rental costs will create obstacles for some brands, leading a number to look to alternative locations in close proximity to the main thoroughfares. While cities will grow in importance, a stronger focus on the use of all channels including online will also be seen to both speed and support expansion.”