NEW YORK CITY-According to CB Richard Ellis, retail rents in prime locations are rising throughout globe, showing increased consumer confidence and market stability. Manhattan's own Fifth Avenue still has the world’s most expensive retail streets, with values reaching $1,900 per square foot per year in the first quarter, the company said in a first quarter report.
Hong Kong was the biggest mover, which moved up to second place in the most-expensive list following a rental hike of 46% quarter-on-quarter, for a total $1, 697 per square foot. The increase was mostly due to a number of high profile leasing deals at key locations on Pedder Street in Central, which has a limited amount of space available for lease, according to CBRE.
Sydney, Australia dropped to third place on the list due to flat growth, at $1,301 per square foot. London’s West End neighborhood registered in fourth place with $909 per square foot, and Zurich jumped up one spot to fifth place with $829 per square foot, due to rental growth of about 9% year over year, CBRE said in the report.
CB Richard Ellis Prime Global Retail Rents
The recovery in the global economy is multi-speed, as economic growth continues to be strong in Latin America and the Asia Pacific, but is weaker in Europe and North America, said Ray Torto, CBRE’s global chief economist, in a statement. “It remains a testing time for retailers, particularly in developed markets, where fewer new shopping venues are making it more difficult for retailers to access the prime space they require. Not only is this putting upward pressure on rents in the most sought after locations, it is also forcing retailers to extend their search criteria and consider taking non-prime locations.”
Overall, emerging regions such as China, Russia, Brazil and Turkey promise to become large markets due to a surge in consumer spending, according to CBRE. However, there are still some shaky areas, with downward pressure still in force in secondary locations. In Europe, Germany and Poland are attracting the most retail attention, but the concerns about the economies of Portugal, Italy, Ireland, Greece and Spain slow down the overall market.
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