Hong Kong, anyone?
If Hong Kong is part of your global expansion initiatives, be prepared to pay the freight.
The most recent retail rent report from CBRE Group labeled Hong Kong as the world’s most expensive retail destination, bettering New York City (No. 2) and Sydney, Australia (No. 3).
In fact, the Q2 2012 CBRE rankings of prime global retail rents saw little change year-over-year, as the top five remained in place. Hong Kong’s retail rents average $3,864 per sq. ft., followed by NYC at $2,475 per sq. ft., Sydney at $1,112, Tokyo at $1,025 and London at $956.
Both Hong Kong and New York experienced significant increases in rents quarter-over-quarter, according to the report.
“As Manhattan’s prime retail zones continue to top U.S. retail rents, we are also seeing consumer demand for higher-end market streets holding steady there, as well as in Los Angeles and Chicago,” said Anthony Buono, executive managing director, National Retail, CBRE. “Despite a still slow but improving economy, that consumer support has in turn encouraged investors to pay premium prices to buy into retail venues in these markets, as can be seen in the recently reported $700 million purchase by Vornado of the major retail space at 666 Fifth Avenue in Manhattan.”
A slow-to-recover global economy appears not to have dampened retailer appetite for prime space in the world’s major cities, but those prime spaces are hard to come by – suggesting that the activity could have been even higher.
Retail rents grew 3.4% in the Americas year-over-year, boosted by increased demand in cities such as Washington, D.C., Miami and Seattle, said CBRE. Growth was 0.5% in the Asia Pacific.
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