New York Overtakes Hong Kong as World’s Most Expensive Shopping Location

— New York’s Upper Fifth Avenue – where rents reached a record $3,500 per sq ft per year – is the world’s costliest retail destination, with Hong Kong’s Causeway Bay seeing a 6.8% fall in rents and edging down into second spot
— Paris saw 6% overall growth but there was no change to rental values in the Champs-Elysees after a 40% rise last year – the street ranks third on this occasion
— Prime retail rents across the globe rose by 2.4% in the 12 months to September 2014
— The Americas showed the strongest regional growth with prime rents increasing by 5.8%, the same figure as last year, while EMEA saw a modest 1.3% rise and Asia Pacific witnessed a 3.6% uplift

Hong Kong — New York’s Upper Fifth Avenue has overtaken Hong Kong’s Causeway Bay as the world’s most expensive shopping destination, according to global real estate adviser Cushman & Wakefield’s flagship retail research report “Main Street Across the World”.

The report is widely recognised as the barometer for the global retail market and ranks the most expensive locations in the top 330 shopping destinations across 65 countries.

Prime retail rents across the globe rose by an average of 2.4% in the 12 months to September 2014, with recovery being sustained but at an overall slower rate. Volatile and somewhat subdued economic activity affected some markets, while structural changes impacting on others. However, despite a more constrained rental growth rate, 277 of the 330 locations surveyed were either static or increased over the year.

The ranking of the most expensive retail locations in each country recorded notable movements this year. Rents in New York’s Upper Fifth Avenue hit a record $3,500 per sq ft per year as it leapfrogged Causeway Bay, which saw rents fall by 6.8%, to secure top spot.

Cushman & Wakefield’s global head of retail John Strachan said: “New York is once again the most expensive shopping destination in the world and for the first time since 2011 – Upper Fifth Avenue also set a new record for the highest retail rents ever recorded. Global gateway markets continue to surge ahead as major brands battle for premier addresses in the top cities.”

Despite seeing no change to rental values after a 40% rise last year, Champs-Elysees in Paris retained its third place, which was followed by London’s New Bond Street in fourth where rents rose by 4.2%. Pitt Street Mall in Sydney completed the top five, with the location surging up three places as it recorded an increase of 25% on the back of a several international retailers taking up large units in the last six months.

Michele Woo, executive director, head of retail, Cushman & Wakefield in Hong Kong, said: “Although New York took first place this year, Hong Kong’s Causeway Bay remains the second most expensive retail location on earth. In 2014, retailers showed caution expanding in Hong Kong in the face of moderating sales performance and less exuberant consumption from mainland visitors. Luxury brands were conservative, while watch and jewellery retailers notably cut back on new stores, with this sector seeing negative growth. Several leading local retailers recorded lower holiday sales. The beginning of the ‘Occupy Central’ protest in Hong Kong since the end of September has further weakened the retail sentiment in major core retail areas, especially in Causeway Bay and Mong Kok where students are still blocking some major roads.”

Occupier conditions in the EMEA region were generally firmer and improved, evidenced by a stabilisation in markets previously witnessing marked declines in rents. However, EMEA growth (1.3%) was held back by significant falls in the Middle East. Indeed, prime rental growth in Europe (2.3%) was not too dissimilar to 2012/2013.

For further detail about specific markets and regions, please find the full report from below link:

www.bdcshk.com/webcontent/Cushman&Wakefield/Research/MSATW2014-15.pdf

Source: Cushman & Wakefield (Lists only one location in each country – full ranking contained in the report)

Image Credit: www.telegraph.co.uk