Cushman & Wakefield: Causeway Bay Remains the World's Costliest Retail Location in the World

• Hong Kong's Causeway Bay remains the world's costliest retail location for the second year running and breaks through the $3,000 per sq ft barrier for the first time in the survey's 25-year history
• New York's Fifth Avenue and Avenue des Champs-Elysees in Paris, which saw nearly a 40% rental rise, hold on to second and third place respectively
• With continued demand from international luxury brands, rents in London's New Bond Street increased by more than 15% as the location climbed from sixth to become the fourth most expensive shopping street in the world
• Global retail rents remain resilient overall with a 3.2% average increase recorded for prime locations
• The Americas showed the strongest regional growth with prime rents increasing by 5.8%

HONG KONG, Nov. 14, 2013 /PRNewswire/ -- Hong Kong's Causeway Bay remains the world's most expensive retail location for the second year running, according to global real estate consultant Cushman & Wakefield's flagship retail research report Main Streets Across the World published today.

Celebrating its 25th year, the report is widely recognised as the barometer for the global retail market and ranks the most expensive locations in the top 334 shopping destinations across 64 countries. 

Although global retail rental growth, at 3.2%, was slightly tempered when compared to the previous 12 months (4.5%), rental values in 285 of the locations surveyed for the report (85%) were either stable or rose.

After being toppled from pole position for the first time in 11 years by Causeway Bay in 2011/2012, Fifth Avenue in New York saw rental values remain static but still held onto second place in the ranking with $2,500 per sq ft – and this was almost $900 per sq ft ahead of its nearest rival: Paris' Avenue des Champs-Elysees, which placed third with $1,601 per sq ft. However, the French location extended its lead over other locations significantly by recording 38.5% growth, the third strongest rental rise globally.

With continued demand from international luxury brands, rents in London's New Bond Street increased by 15.6% to $1,047 per sq ft as the location jumped from sixth to become the fourth most expensive shopping street in the world, replacing Ginza ($984 per sq ft) in Tokyo which moves down into fifth place this year.  The other highest climber in the ranking's top ten was Via Montenapoleone in Milan ($906 per sq ft) which witnessed a 7.4% rise in retail rents and moved up the table from eighth to sixth.

Cushman & Wakefield's global head of retail, John Strachan, said: "Once again, we have seen Fifth Avenue and Causeway Bay retain their titles as the most expensive retail locations in the world. But we have also seen positive growth across almost all of the top global cities as international brands continue to compete for premier positions in the world's most highly sought after shopping streets."

Source: Cushman & Wakefield (Lists only one location in each country. Full ranking contained in the report)

When Main Streets Across the World was first published in 1988, the most expensive retail city globally was New York, followed by Munich in second position, Tokyo in third, Paris in fourth and London in fifth.

Asia Pacific

Asia Pacific remained the focus for international retailers and this again translated into prime rental growth (4.5%) in the last year. However, the region was characterised by contrasting fortunes among retailers in different markets, slower growth generally and a greater emphasis on non-luxury retailers.

Hong Kong (21.8%) was yet again the main market behind the drive in prime rental growth across the region. Furthermore, exceptional rental increases in the three premier shopping destinations of Hong Kong propelled them into the first, second and third spots of the most expensive locations in Asia Pacific. Causeway Bay (14.7%) tops the list of the most expensive retail locations in Asia Pacific as well as globally. Its nearest challenger, Hong Kong Central, did however narrow the gap slightly, with rental values soaring by 23.3% in the last year.

In China, the attraction of the market remained unchanged (6.8%). Despite slower trading in the luxury sector and an increased supply of retail space, the country saw a diverse range of new entrants and expansions from several international brands.

The slowdown in South Korean (7.2%) consumer spending had an adverse impact on luxury brands in that market, although this slack was picked up by 'fast fashion' brands, which saw an upward trend in performance.

Conditions and sentiment in the Japanese market (6.2%) improved considerably this year, supported by good economic growth and high retail spending. Rents in Taiwan also rose considerably (10%), due in particular to strong demand from restaurant chains and international fashion and clothing brands entering the market. Steady demand from fashion and food and beverage brands was also the catalyst behind the rise in India (2.1%).

Michele Woo, executive director, head of retail, Cushman & Wakefield in Hong Kong, said: "Hong Kong's Causeway Bay remains the world's most expensive retail location for another year and it will further bolster its position once luxury goods sales return to near peak levels. Additionally, same-day visitors from mainland China to Hong Kong are driving a rise in spending on household goods and daily necessities, as the demand for 'convenience retail' increases. This trend has shifted the spending pattern from just luxury to also medium-priced goods in the city."

Source: Cushman & Wakefield

The Americas

Despite being partly affected by slower economic activity and in some cases increased retail supply, the Americas showed the strongest regional growth with prime rents increasing by 5.8%. But this was down on the 10.9% rise recorded in 2011/2012.

EMEA

Rental growth in the EMEA region increased by 2.1% overall, fuelled by better economic news in Europe, greater finance availability, a very active demand from luxury retailers and improved general consumer sentiment. Specifically, there were encouraging performances from Western (2.4%) and Eastern Europe (2.6%). Out of the 33 EMEA countries surveyed in the report, only seven recorded rental falls while the other 26 saw values either stabilise or rise.