Cushman & Wakefield : Retail Rents Rise in the World’s Most Expensive
TORONTO -- November 14, 2012
Cushman & Wakefield:
*Causeway Bay, Hong Kong overtakes Fifth Avenue, New York as the most
expensive retail destination in the world, with the latter losing first
spot for the first time in 11 years.
*Bloor Street in Toronto has remains the 20^th most expensive globally.
*Avenue des Champs-Élysées, Paris witnessed strong rental growth and
replaced Ginza Tokyo in third place.
*Global retail rents remained resilient overall, recording a 4.5% average
increase for prime locations.
*International luxury retailers continue to drive demand for space in the
*South America showed the strongest rental uplift by region, with prime
rents increasing by 11.6%.
“Despite a backdrop of a slower global economy and continued uncertainty –
notably surrounding the euro zone – global prime retail markets have proved
generally resilient over the year to June, with rental growth driven in
particular by a strong performance in Asia and the Americas.” according to
Cushman & Wakefield’s latest Main Streets Across the World report launched
Of the 326 prime locations in 62 countries surveyed for the report, a total of
147 saw rents increasing with just 49 (15%) experiencing rental declines –
compared with (19%) in 2011.
The world’s ten most expensive retail locations in each country (2012)
Rank Rank US$/sq €/sq change
2012 2011 Country City Street ft/year m/year
1 2 Hong Kong Hong Causeway Bay 2,630 22,307 34.9
2 1 USA New Fifth Avenue 2,500 21,204 11.1
3 5 France Paris Avenue des 1,129 9,573 30.0
4 3 Japan Tokyo Ginza 1,057 8,962 0.0
5 4 Australia Sydney Pitt Street 952 8,077 0.0
6 6 UK London New Bond Street 936 7,942 3.1
7 8 Switzerland Zurich Bahnhofstrasse 854 7,243 8.7
8 7 Italy Milan Via 825 7,000 2.9
9 9 South Korea Seoul Myeongdong 686 5,822 16.0
10 10 Germany Munich Kaufingerstraße 495 4,200 6.1
^Source: Cushman & Wakefield (full ranking contained in the report)
Hong Kong’s Causeway Bay driven by a surge in demand and leasing activity
experienced a 34.9% hike in rental values to US$2,630 sq ft overtaking Fifth
Avenue in New York at US$2,500 sq ft, as the most expensive retail destination
in the world – the first time Fifth Avenue has not been top in 11 years.
The biggest climber in the top ten was Avenue des Champs-Élysées in Paris at
US$1,129 sq.ft, which jumped two places into third spot, leaving Ginza Tokyo
in fourth place US$ 1,057 sq ft.
Luxury retailing continues to fuel trading and rental growth across prime
pitches of the global market. Luxury retailers are competing for the most
coveted shopping destinations, exerting upward pressure on prime rental
values. Despite recent slower sales growth, the luxury sector will remain
resilient and continue to play a vital and prominent role in driving overall
performance in the world’s premier locations.
Martin Mahmuti - Analyst, European Research Group: “Looking ahead, the main
drivers behind global growth are not expected to shift significantly – with
growing structural demand in tier 1 locations, market globalization and luxury
expansion in key developments.”
John Strachan - Head of Global Retail Services, “There has been the usual
jostling for the top positions between Hong Kong and New York but of course
the real message here is the unfaltering advance of the top global cities,
fuelled by a shortage of supply and the interest of international brands.”
The Americas showed the strongest rental growth of all regions. Prime rental
rises in North American locations were driven by the strong performance of the
US (16.3%) and Mexico (11.5%), while Canadian values recording a marginal
Conditions in the US retail market improved over the year as sales and leasing
activity picked up –albeit mainly in the prime segment. However, further falls
in vacancy rates and limited new supply on the market could see the overall
rental rate increase over the next 12 months for the first time since 2008.
Matt Winn, Senior Managing Director, Head of Retail Services, Americas “The
last year saw continued strong rental growth across the Americas led by the
recovering economy and strong demographic trends in the US and Latin America.
Given current demand for urban units from a broad range of retailers we expect
this trend to continue in prime areas as well as secondary locations
throughout the region. Supply constraints in key markets may in fact limit
growth going forward as demand remains higher than available supply in many
John Crombie, Senior Managing Director, C&W, Canada - “The Canadian retail
market is a great place to be right now. Demand for retail space has remained
steady over the last 12 months with growth recorded in selected prime
locations resulting in a slight fall in the overall retail vacancy rate.
Despite keen interest from both American and international retailers, there
has been a slight slowdown in leasing activity for foreign retailers as entry
costs have proven to be higher than expected and new sites harder to find for
new retailers considering Canada as a place to open their business.”
That said, with activity from American retailers like J. Crew and Brooks
Brothers to name a few, Toronto’s Bloor Street rents has gone up by 1.6%, and
remains the 20th most expensive street in the world for retail space.
Montreal’s Ste-Catherine West’s revamped street appeal has helped attract a
larger number of retailers looking for a prime space and rents have increased
by an average of 12.5 per cent.
Of all Canadian main streets, Robson Street in Vancouver is the only area that
has seen a decrease in rental rates and activity, falling from $240/square
foot in 2011 to $220/square foot in 2012 with most luxury retailers choosing
to locate on neighboring Alberni Street.
Development continues in both the urban and suburban areas of major Canadian
cities, with many mixed-use projects either planned or under construction. A
number of retailers are resizing their stores to a smaller format, and
vacancies in big boxes have increased. While this trend is expected to
continue over the next 12 months; it will also present some opportunities for
retailers looking for ‘ready-to-use’ properties as opposed to new
Despite a slight deceleration in regional growth rate in Asia Pacific to 8.6%
compared with 12.2% in 2011, occupier demand in the region remained robust,
with retailers eager to tap into a generally younger but increasingly affluent
middle-class. Asia Pacific also contained five of the 10 most expensive global
locations and operators continued to compete for the limited prime space in
the coveted destinations of Hong Kong and South Korea.
The highlight of this year’s survey was Hong Kong with advance 21.8% as a
result of extremely active demand from a diverse group of new international
retailers, expansion plans from existing brands and very limited availability.
Indeed, notwithstanding slowing economic activity, retailers continued to see
the market as the ideal launching platform into mainland China.
The retail sectors performance across the region remained deeply polarized
over the past year, with premier locations in most large cities attracting
good demand from international luxury brands. At the same time, even in
stronger cities, secondary pitches are still struggling on the back of rising
availability and weak consumer sentiment.
EMEA prime values were up by 1.7% in the year to June, boosted by the
continued demand from international fashion brands and the luxury sector.
Prime rents in 25 of the 31 European markets surveyed saw rents remain stable
or increase, whilst they fell noticeably in countries affected by austerity
measures e.g. Greece (17.1%), Ireland (15.1%) Hungary (13.3%), or by
increasing supply e.g. Bulgaria (7.7%).
Avenue des Champs-Élysées, Paris was again the most expensive retail location
in the EMEA region, recording rental growth of 30.0% over the year and
widening the rental difference on second placed New Bond Street, London.
Pierre Raynal, Head of Retail Agency France, said “Over the past few months,
strong international retailer demand continued toboost the main thoroughfares
of Paris. The Champs-Elysées in particular, which in 2011 saw the grand
openings of Marks & Spencer, Abercrombie & Fitch and Banana Republic has
remained in the spotlight in 2012 with the opening of Levi Strauss,Kusmi Tea
and the refurbishment of Hugo Boss flagship stores. Withtourist
numbersexpected to growfurther inthe next few years Paris, one of Europe’s
key gateway cities, will continue to benefit from strong retailer demand.”
About Cushman & Wakefield
Cushman & Wakefield is the world’s largest privately-held commercial real
estate services firm. The company advises and represents clients on all
aspects of property occupancy and investment, and has established a preeminent
position in the world’s major markets, as evidenced by its frequent
involvement in many of the most significant property leases, sales and
Founded in 1917 it has 243 offices in 60 countries and more than 14,000
employees. It offers a complete range of services for all property types,
including leasing, sales and acquisitions, equity, debt and structured
finance, corporate finance and investment banking, corporate services,
property management, facilities management, project management, consulting and
valuation. The firm has more than $4 billion in assets under management
through its wholly-owned subsidiary Cushman & Wakefield Investors. A
recognized leader in local and global real estate research, the firm publishes
its market information and studies online at
Odette Coleman, 416-315-6343
Press spacebar to pause and continue. Press esc to stop.