HONG KONG, Nov 14, 2012 /PRNewswire/ --
Cushman & Wakefield, the world's largest privately owned real estate services firm, announced the Main Streets Across the World report, showing that 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.
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 2012 | Rank 2011 | Country | City | Street | US$/sq ft/year | euro/sq m/year | % change local measure |
1 | 2 | Hong Kong (mainland China) | Hong Kong | Causeway Bay | 2,630 | 22,307 | 34.9 |
2 | 1 | USA | New York | Fifth Avenue | 2,500 | 21,204 | 11.1 |
3 | 5 | France | Paris | Avenue des Champs-Elysees | 1,129 | 9,573 | 30.0 |
4 | 3 | Japan | Tokyo | Ginza | 1,057 | 8,962 | 0.0 |
5 | 4 | Australia | Sydney | Pitt Street Mall | 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 Montenapoleone | 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 per annum 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- Elysees 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.
John Strachan, Head of Global Retail Services, said, "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."
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.
Prime rents in India rose by 12.5% on the back of strong occupier demand across all sub-sectors, however, some retailers were increasingly favouring high street properties at the expense of shopping centres, evidenced by the 75.0% increase in rents in Colaba Causeway in Mumbai - the highest increase globally.
Hong Kong's Causeway Bay was the most expensive retail location in Asia Pacific, widening the rental difference on second placed Central, Hong Kong further.
The ten most expensive retail locations in Asia Pacific
Rank 2012 | Country | City | Street | US$/sq ft/year | euro/sq m/year | % change local measure |
1 | Hong Kong (mainland China) | Hong Kong | Causeway Bay | 2,630 | 22,307 | 34.9 |
2 | Hong Kong (mainland China) | Hong Kong | Central | 1,856 | 15,746 | 14.3 |
3 | Hong Kong (mainland China) | Hong Kong | Tsim Sha Tsui | 1,547 | 13,122 | 12.0 |
4 | Japan | Tokyo | Ginza | 1,057 | 8,962 | 0.0 |
5 | Japan | Tokyo | Omotesando | 972 | 8,245 | 0.0 |
6 | Australia | Sydney | Pitt Street Mall | 952 | 8,077 | 0.0 |
7 | South Korea | Seoul | Myeongdong | 686 | 5,822 | 16.0 |
8 | Japan | Tokyo | Shibuya | 634 | 5,377 | 0.0 |
9 | South Korea | Seoul | Gangnam Station | 590 | 5,003 | 18.8 |
10 | Australia | Brisbane | Queen Street Mall | 476 | 4,038 | 0.0 |
Source: Cushman & Wakefield
Michele Woo, Senior Director, Retail Transaction Services, Hong Kong, said, "the highlight of Asia this year was Hong Kong where we saw prime rents surge by 21.8% as a result of a strong demand from diverse group of new international retailers and the scarcity of available space. The recent announcement of a new duty on foreign home buyers has led to a further shift to retail property investment in HK. In addition, there is a slowing in leasing activity in the past month as retailers adopt a wait and see approach towards year-end and the new China leadership confirmation after the 18th National Congress. Notwithstanding this, Hong Kong will remain the ideal launching platform into China for international retailers although we are unlikely to see these very high levels of rental growth sustained. Overall we expect retail activity Asia Pacific will remain healthy as international retailers struggling to generate profitable trading in their own markets and need to look for expansion opportunities in the region."
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 assignments. Founded in 1917, it has 235 offices in 60 countries and more than 14,000 employees. It offers a complete range of services for all property types, fully-integrated on a global basis, including leasing, sales and acquisitions, debt and equity financing, investment banking, corporate services, property management, facilities management, project management, consulting and appraisal. The firm has more than $5.5 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 www.cushmanwakefield.com/knowledge. In China, Cushman & Wakefield maintains six market-leading offices in Beijing, Shanghai, Chengdu, Guangzhou, Shenzhen and Hong Kong. More information is available at www.cushmanwakefield.com.