Top five priciest retail rents in the world go to…
New York -Manhattan’s high-profile Fifth Avenue, at a whopping $3,550 per sq. ft., and Hong Kong’s Queen’s Road Central, at $2,073 per sq. ft., stand out as the most expensive retail rents in the world, according to Colliers International. Rounding out the top five are Hong Kong’s Canton Road, Manhattan’s Madison Avenue and Paris’ Champs Elysees. (See end of story for a more complete list.)
“Our analysis of the global retail real estate environment reveals what we have been seeing this year—a retail market that is cautiously optimistic and steadily growing in many sectors despite some hiccups of caution due to threats to global economic growth and the shadow of e-commerce,” said Anjee Solanki, national director, retail services | USA, Colliers International. “Luxury, in particular, serves as a major spark to the expansion we are seeing, and this is even in regions such as Europe and Asia with weak GDP growth and consumer spending.”
Key findings include:
Luxury retailers are in the sweet spot. Luxury retailers are benefitting from income gains among the top earners and are thriving throughout many of the top global markets, including Paris, London, New York and prime cities in Asia. The growth in this sector is a key factor in driving expansion across the board.
New supply is robust in developing markets. The global expansion of the workforce and the middle class is spurring a need for new supply, which is concentrated in developing countries in Europe, the Middle East and Asia that have economic growth, political stability, a growing middle class and business-friendly regulatory environments.
Optimism is tempered by threats to global economic growth and the specter of e-commerce. E-commerce is affecting both traditional and luxury retailers across the globe, exerting pressure on merchants to become more creative with concepts regarding their use of space. One popular strategy is to transform stores into product showrooms in an attempt to entice greater foot traffic and additional online sales.
Here are the top 10 global retail rents (per square foot):
$3,550 New York, Fifth Avenue
$2,073 Hong Kong, Queen's Road Central, Central
$2,011 Hong Kong, Canton Road, Tsim Sha Tsui
$1,643 New York, Madison Avenue
$1,543 Paris, Champs Elysees
$1,340 London, Old Bond Street
$1,103 Hong Kong, Causeway Bay
$998 Zurich, Bahnhofstrasse
$890 Milan, Via Monte Napoleone
$786 Moscow, Stoleshnikov Lane