Retail rents in the world’s leading shopping streets continue to grow despite the global economic downturn, according to Cushman & Wakefield’s latest Main Streets Across the World report launched at MAPIC.
The research, which surveys shopping streets across 48 countries, found that retail rents had risen or had at least remained stable in 94% of 236 streets monitored.
The world’s most expensive street continues to be New York’s Fifth Avenue where retailers can now expect to pay rents of $1,850/sq ft per annum. Remarkably this represents a retail rental rise of 23% compared with 2007.
Fast closing on Fifth Avenue top position is Hong Kong’s Causeway Bay where rents rose a staggering 46.8% in the past 12 months to $1,784/sq ft per annum. Paris’ Avenue des Champs Elysees was ranked third at $1,134/sq ft (up 5% on 2007), Milan’s Via Montenapoleone was fourth with $983/sq ft (up 11.7%) and Dublin’s Graton Street fifth with $824/sq ft (up 5.3%)
Gene Spiegelman, executive director at Cushman & Wakefield New York said: ‘The subject rents may appear unsustainable at this moment in time but, placed in strategic context, these commitments represent exclusive long term opportunities for a highly competitive group of global retail brands who recognise the value of flagship real estate as an effective vehicle for brand communication. We expect this trend to continue.’
London’s Bond Street slipped out of the top five and saw it ranking fall from fourth to sixth as it was one of the few streets in the top ten not to experience retail rental growth in the past year with rents remaining at $810/sq ft per annum.
But Bond Street was in a minority as 83.3% of the streets surveyed experienced rental growth and only 6.4% suffering a decline. Mumbai’s Colaba Causeway showed the strongest growth with rents rising over 182% to $269 sq ft/ per annum.
John Strachan, global head of retail, Cushman & Wakefield added: ‘Demand for often scarce prime retail space on the world’s main streets is being driven by a number of factors.
’For luxury and high end retailers, a presence on the most prestigious streets is deemed essential for brand positioning, sometimes regardless of how profitable a store might be. Such brand profile helps to drive revenue through other channels such as the internet, and sales of product lines such as perfumes and accessories which are sold more widely.’