London and Hong Kong top league for business rents
THERE'S expensive and then there's Hong Kong and London. The former British colony is the world's most expensive place to site a shop while London is the most expensive place for an office.
The Asian shopping haven kept its crown in the first quarter as having the world's highest rent for prime retail properties, at nearly 50pc more than for similar districts, such as upper Fifth Avenue in Manhattan. Rents were more than four times the rate in similar areas in London and Paris, according to a report by global property adviser CBRE Group Inc.
The 10 most expensive cities for retailers benefit from strong demand and modest new supply, a recipe for stable, record-high, prime rental rates, the recently released report showed.
In some markets, such as Hong Kong and London, the sky-high rents have prompted some newcomers to look nearby. For example, in London, Mayfair has benefited from those priced out of Bond Street.
Annual retail rent in high-end shopping areas in Hong Kong averaged €35,756 per square metre.
"Hong Kong's unparalleled luxury retail scene holds the highest representation of luxury retailers of all global cities. Finding an adequate unit in Hong Kong's prime retail locations continued to be a major challenge for new and existing retailers. Units in prime locations with wide shopfronts and large ground floors rarely become available, leaving retailers with few choices," CBRE said.
New York ranked second among the most expensive global retail markets, with prime rents averaging €25,199 per square metre.
Europe's prime retail markets followed, with Paris at $1,220 per square foot (€10,080 per square metre), and London at €9,554 per square metre.
The supply of prime space was tight elsewhere in the Asia Pacific region. An inflow of US retailers helped Sydney maintain its prime rent in Q1 but in Q2 it fell to an average of €7,808 per square metre – down from €8,549 at the end of March.
Zurich was sixth, at €7,404 per square metre, followed by Tokyo, at €7,135 per square meter.
Melbourne came in eighth at €6,559 per square metre. Brisbane's mining and natural resource sectors and its growing population helped keep it in the top 10 with its prime retail rents up 15pc to €4,953 per metre.
That was well down on the first quarter of the year, however, where the equivalent rent was €6,209.
Moscow moved up to ninth from 10th, with rents at €6,102 per square metre.
The story is a little different when it comes to office space.
Here, London recently elbowed its way past Hong Kong to regain the title as the world's most expensive market in which to rent office space, while Rio de Janeiro jumped to the No 3 spot from No 8, according to a report by global real-estate services firm Cushman & Wakefield. (Reuters)