CBRE Group, Inc. Reports Strong Retailer Demand and Limited Pipeline Lead to Record Retail Rents

  CBRE Group, Inc. Reports Strong Retailer Demand and Limited Pipeline Lead to
  Record Retail Rents

          Hong Kong Continues to Easily Command Highest Retail Rents

Business Wire

LOS ANGELES -- May 13, 2013

Hong Kong continues to rank as the world’s most expensive global retail
market, recording prime rents nearly 150 percent higher than New York City and
more than 400 percent higher than London and Paris, according to new research
from CBRE Group, Inc. (NYSE:CBG)

CBRE’s quarterly survey (Q1 2013), which tracks the top 10 most expensive
prime global retail markets, reveals that strong demand from international
retailers, coupled with a modest supply pipeline, has led to record-high prime
rental rates. Leading the pack, Hong Kong continues to rank in a rental class
distinctly above its global peers, recording prime rental rates during Q1 2013
of $4,328 per square foot per annum.

While markets such as Hong Kong, New York City, London and Paris did not
record increases in prime rents this quarter, these cities have exhibited
resilience due to international retailers’ continued longer-term strategic
expansion strategies, which evidence a distinct preference for prime space in
the best locations in these markets.

Prime Retail Rent Ranking by US$ per Sq. Ft. per Annum Basis
              Q1 2013           Q1 2013        Q1 2013 Local
Markets     US$ Per Sq Ft   € Per Sq M   Currency Rent/
              Per Annum         Per Annum      Measurement
Hong Kong   $4,328          €36,351      HK$ 2,800 psf pm
New York    $2,970          €24,944      US$ 2,970 psf pa
London      $1,053          €8,843       £ 1,100 ITZA pa
Paris       $1,050          €8,820       € 14,000 ITZA pa
Sydney      $1,018          €8,549       AUS$ 10,525 psm pa
Tokyo       $895            €7,519       JPY 250,000 per tsubo pm
Melbourne   $851            €7,148       AUS$ 8,800 psm pa
Zurich      $822            €6,905       CHF 8,400 psm pa
Brisbane    $739            €6,209       AUS$ 7,645 psm pa
Moscow      $739            €6,203       US$ 7,950 psm pa
Source:CBREResearch, Q1 2013.

Joe Lin, Executive Director Retail, Hong Kong, CBRE, commented:

“Prime rents in Hong Kong stand at record highs as tenant demand is steady and
inquiries from retailers looking to enter or increase their footprint in the
city remain strong. Given that space is so expensive in Hong Kong’s prime
shopping streets largely driven by continued demand from international luxury
brands, many traditional retailers have moved into more ‘niche’ secondary
retail locations as they still want to be in the market, but have been priced
out of the prime space.”

Ranking as the second most expensive global retail market, New York City
($2,970 per sq. ft.) welcomed several new national and global retailers in
2012 that were attracted by the market’s strong international tourism
features. The pipeline for new retail space in New York City is low. However,
a significant amount of prime space is available along Fifth Avenue between
49th and 59th Street.

Europe’s prime retail markets of London ($1,053 per sq. ft.) and Paris ($1,050
per sq. ft.) are holding steady, largely due to scarcity of supply and
correspondingly high rent levels. As witnessed in Hong Kong, many new
retailers to the Central London market have been forced to consider
alternative locations. This is most apparent on Bond Street, where retailers
have looked to alternative locations in Mayfair. Examples include the fashion
retailer Oscar de la Renta, which has now opened a 2,000 sq. ft. store on
Mount Street, with Celine also taking an 8,000 sq. ft. unit a few doors down.
The openings represent the first UK store for each.

The tight supply of prime space throughout the Asia Pacific region helped
maintain rent levels in Sydney, Melbourne, Beijing and Tokyo. In Sydney
($1,018 per sq. ft.), demand from international retailers (especially from the
US) is high with many new brands set to enter the market in 2013.

Pacific markets gained prominence in the global retail rankings with Brisbane
($739 per sq. ft.) and Melbourne ($851 per sq. ft.) now ranking among the most
expensive prime retail markets. Thanks to strong turnover and a limited supply
forecast for Brisbane’s Queen Street Mall, prime rents as measured in local
currency jumped 15% quarter-over-quarter. As a result, Brisbane’s prime retail
rent ranking rose two positions to ninth place. Not only has Brisbane’s mining
and other natural resources sectors supported the local economy, population
growth is also serving to boost expectations for future retail growth
prospects. As such, rental growth is expected to continue in line with the
current trend.

Raymond Torto, CBRE’s Global Chief Economist, commented:

“Prime retail rents across the most expensive global markets have held firm
against a backdrop of scarce supply and preference for prime space. Despite
subdued retail sales growth and strained consumer sentiments, international
retailers remain focused on long-term growth strategies that have resulted in
store expansions across many key global markets such as New York City, London
and Moscow. However, at the current high levels, retailers are considering
‘off’ prime or secondary locations and showing a reluctance to pay record high

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered
in Los Angeles, is the world’s largest commercial real estate services and
investment firm (in terms of 2012 revenue). The Company has approximately
37,000 employees (excluding affiliates), and serves real estate owners,
investors and occupiers through more than 300 offices (excluding affiliates)
worldwide. CBRE offers strategic advice and execution for property sales and
leasing; corporate services; property, facilities and project management;
mortgage banking; appraisal and valuation; development services; investment
management; and research and consulting. Please visit our website at


CBRE Group, Inc.
Steve Iaco, 212-984-6535
Robert McGrath, 212-984-8267
Aaron Richardson, (011) 44-207-182-3329
Press spacebar to pause and continue. Press esc to stop.