Colliers Highlights Global Retail Trends

SEATTLE-Global retail markets rebounded in the first half of the year, with international and luxury brands expanding to new markets and high street properties growing in popularity, according to a new report from Colliers International.

The 2013 Global Retail Highlights Report indicates increasing sales around the world, growing rents in highly coveted locations, and rising demand for retail presence in key tourist destinations.

Around the world, Colliers retail property market analysis shows retail rents are most expensive on high streets in New York, London and Hong Kong.

Top five rents are:

1. New York, Fifth Avenue—$3,052
2. Hong Kong, Queen's Road Central—$2,087
3. Hong Kong, Canton Road, Tsim Sha Tsui—$1,994
4. New York, Madison Avenue—$1,325
5. London, Old Bond Street—$1,223

"We're seeing luxury brands build a strong presence in sought-after shopping districts like Pitt Street Mall in Sydney and Regent Street in London, while international brands are opening new flagship stores in high-traffic locations," said Solomon Ets-Hokin, chair of retail services at Colliers International. "Many well-recognized brands, such as Apple, Zara, Topshop and Victoria's Secret, are taking advantage of increased consumer spending, especially among tourists. In the U.S., Philadelphia's Walnut Street emerged as a surprise with the fastest-rising rent in the nation, growing nearly 34 percent in the past year. Further, in emerging markets in Peru and Colombia, sustained growth of the middle class has significantly impacted retail sales and rising rents in shopping centers."
Colliers market experts point to several key retail property market trends in the global commercial real estate industry for the first half of 2013:

Tourism Drives Retail Sales in Hong Kong: Despite slow economic growth
        in China, tourist spending has helped maintain retail sales volume. In
        just three months, more than 12 million visitors flocked to Hong Kong,
        an 11.8% increase versus the same time frame in 2012. As international
        retailers expand to Hong Kong, the flurry of business has contributed to
        rising rents, forcing some retailers to second-tier streets.
Luxury and International Brands Expand in Australia and Brazil:
        Australia's central business districts (CBD) in Sydney and Melbourne
        have been revived with many major international brands such as Zara,
        Apple and Topshop, along with luxury retailers. The largest development,
        The Emporium in Melbourne's CBD, will have space for nearly 200 new
        retailers. Pitt Street Mall in Sydney's CBD is actually ranked as having
        the ninth most expensive rent globally. Similarly in Brazil, many
        retailers planned expansions based on a nearly 9%
        year-over-year sales growth in 2012, but that trend has not continued in
        2013. The Brazilian Association of Franchising reports 122 new retail
        centers will be built in the next five years. Already the most expensive
        in Latin America, Brazil's high street rents will continue to climb,
        with roughly 15 percent growth over 2012 in Sao Paulo.
U.S. High Street Rents Continue to Climb: Popular retail destinations in
        major metro areas are seeing big increases in rents. In New York, rents
        on Fifth Avenue increased by 11 percent from the previous year-- the
        most expensive in the world at $3,052 per square foot. In Las Vegas,
        rents on the Boulevard increased by 25% . Although U.S consumer
        retail spending continues its upward trend, major discount retailers
        such as Walmart and Kohl's have shown little growth.

"Retailers are working hard to remain competitive in an increasingly crowded marketplace," said Vikki Johnson, senior managing director of Colliers International's Retail Services Group in San Francisco. "The influx of new foreign brands into the U.S. market reflects their confidence in our economic recovery, with foreign tourists driving a large percentage of the increase in sales nationally. However, with the impacts of the government shutdown yet to be seen, unemployment still high, manufacturing and construction slowing, we can expect retail spending to level out or soften for the remainder of the year."

Colliers International is a global leader in commercial real estate services, with over 13,500 professionals operating out of more than 482 offices in 62 countries. A subsidiary of FirstService Corporation, Colliers International delivers a full range of services to real estate users.