Hong Kong and New York have the world’s costliest high streets for retailers as strong demand and a dearth of space in the most sought-after areas push rents higher, CBRE Group Inc. said.
Retail rents in Hong Kong jumped 19 percent in the three months ended March 31 from a year earlier to $3,864 per square foot per year, while prices in New York climbed 15.1 percent to $2,475, the property broker said in an e-mailed report.
“This quarter has seen more positive aspects than the last, with improved consumer spending as well as steady occupier demand and new shopping centers,” Ray Torto, global chief economist at CBRE, said in a separate release. “Despite concerns over the eurozone and a slowing world economy, retailer demand for prime space in major cities remains strong; however, prime space is in short supply in many markets.”
In Hong Kong, average retail rents have climbed for seven of the past eight years as fashion and luxury brands bet Chinese shoppers will keep up their spending in the city, which has no consumption tax, according to London-based Savills. Sales of luxury products excluding jewelry in the U.S. gained 6.7 percent in the first quarter, according to MasterCard Advisors SpendingPulse, which tracks retail sales in all payment forms.
Washington D.C. had the biggest gains during the quarter, with rents surging about 60 percent from a year earlier, the CBRE survey showed. Brisbane and Sydney also saw rents drop, about 15 percent, although Sydney retained its place as the third most-expensive city for retailers.
Total retail rents across all regions rose 0.8 percent in the first three months of 2012 from the previous quarter, CBRE said in the report. The Americas were in the lead, with growth of 3.4 percent, followed by the Asia-Pacific region rising 0.5 percent. Average prime rents in Europe, the Middle East and Africa fell 0.2 percent during the quarter.