World's priciest shopping districts defy sagging retail market
Store rents in the world’s most expensive shopping districts increased in the first quarter, defying a sustained slump in global retail markets, according to CB Richard Ellis Group.
New York City maintained its position as the most expensive city to lease retail space, with annual rents on Manhattan’s Fifth Avenue rising 5.2pc from the previous quarter to $1,725 a square foot, the Los Angeles-based broker said in a report published today. That’s still 4.2pc lower than a year earlier.
The global economy is set to expand 4.2pc this year according to the International Monetary Fund, prompting financially healthy retailers to expand and encouraging international brands to enter new markets.
In most places, that hasn’t translated into a significant recovery in retail sales as consumers remain uneasy about the economic outlook, CBRE said in the report.
“Whilst prime space is doing well, secondary units are typically seeing higher vacancy, lower retailer demand and falling rents,” Raymond Torto, CBRE’s global chief economist, said in the report.
Sydney maintained its second-place rank with rents at $1,155 a square foot, followed by Hong Kong at $974, London at $861 and Paris at $791.
Rents in the UK capital increased by 20pc from a year earlier, lifted by strong demand, low vacancy rates and a lack of new developments. Sydney was seventh a year ago.
Rents in Frankfurt, Berlin and Dublin, the bottom three of the 20 most expensive cities, were less than a quarter of those on Fifth Avenue, the broker said.
Economic difficulties in the Middle East and Greece caused prime rents to slump by 25pc in Abu Dhabi and 12pc in Athens during the quarter.
In the European Union, where economic growth is set to lag behind the US and Asia this year, rents for the best shops slipped 0.2pc in the quarter from the fourth quarter and 0.5pc from a year earlier, CBRE said.