For the first time in five years, Hong Kong’s Causeway Bay has replaced New York’s Upper 5th Avenue as the world’s most expensive retail street by rental value, data from Cushman & Wakefield has revealed.
A significant decline in New York rents has seen Upper 5th Avenue slip to second place globally, with average rents at US$2 250/square foot/year compared with $3 000 in the previous 12-month period (about R32 000).
This data has been published in the 30th annual Main Streets Across the World report which tracks 446 of top retail streets around the globe, ranking them by their prime rental value according to Cushman & Wakefield’s proprietary data, which includes a list of the most expensive streets in 65 countries.
Despite a small decline in average rents, Hong Kong’s Causeway Bay area takes top spot with $2 671/sq.ft/year. London’s New Bond Street is the most expensive European location, in third globally, with rents broadly flat year-on-year at $1 744/sq.ft/year.
The first Main Streets report in 1988 showed New York’s East 57th Street was the world’s most expensive high street at $425/sq.ft/year. Since then the number one spot has been dominated by streets in either New York or Hong Kong, with only Tokyo’s Ginza outside these able to achieve this.
Appetite for premium retail sites globally is “still significant”, with top retailers using stores as part of their customer experience strategy, says report author Darren Yates, head of Europe, the Middle East and Africa (EMEA) retail research at Cushman & Wakefield.
“While global trends are not completely uniform, there are common themes. The most notable include the continued growth of online, omni-channel retailing as standard and significant investment in store design. While technology is still a major disruptor in retailing, it is also allows retailers to better understand their customers and enhance the in-store experience.”
But while there is still a “healthy” future for this sector, Justin Taylor, head of EMEA Retail at Cushman & Wakefield, says it is moving to a “beyond retail” phase driven by societal and technological change.
This means business models will have to adapt. “Traditional retail will survive, but will likely form a smaller part of the occupier mix. Traditional retail is being resized and reinvented. This is most evident in the US and the UK, which have felt the force of retailer restructuring and shrinking store networks in some sectors, and a downward readjustment of rents in some areas.”
Highest earners
The Top 10 most expensive retail locations:
1. Causeway Bay (main street shops), Hong Kong: $2671/square foot
2. Upper 5th Avenue, New York, US: $2250/sq.ft
3. New Bond Street, London, UK: $1744/sq.ft
4. Avenue des Champs Elysees, Paris, France: $1519/sq.ft
5. Via Montenapoleone, Milan, Italy: $1466/sq.ft
6. Ginza, Tokyo, Japan: $1219/sq.ft
7. Pitt Street Mall, Sydney, Australia: $964/sq.ft
8. Myeongdong, Seoul, South Korea: $908/sq.ft
9. Bahnhofstrasse, Zurich, Switzerland: $854/sq.ft
10. Kohlmarkt, Vienna, Austria: $515/sq.ft