by Brianna Crandall — December 9, 2013—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 2013-2014, published in November.
Celebrating its 25th year, the report is widely recognized as an important barometer for the global retail market, ranking the most expensive locations in the top 334 shopping destinations across 64 countries and providing overall regional commentary as well as specific luxury retail overviews for each region.
The report indicated positive growth across almost all of the top global cities. 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, according to the report. The Americas showed the strongest regional growth, with prime rents increasing by 5.8%.
Fueled by competition between both high-end and non-luxury retailers for limited space, Causeway Bay in Hong Kong 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-Elysées, 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.
This global barometer of the retail sector tracks rents in the world’s top 334 shopping locations across 64 countries, ranking the most expensive location in each of the countries monitored.
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Martin Mahmuti, a senior analyst in Cushman & Wakefield’s European Research Group, commented, “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.”
Global real estate consultant Cushman & Wakefield, reportedly the world’s largest privately held property advisor, monitors and analyzes the evolution of the industry and global retail trends to ensure its clients are best positioned to capitalize on future developments in the sector.
