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01. September 2011 
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Global retail markets rebound strongly
Despite the fragile economic recovery and subdued consumer sentiment in many countries, global retail markets have rebounded strongly during the last year according to Cushman & Wakefield. Over four-fifths (81%) of the 63 countries surveyed by the global real estate adviser for its Main Streets Across the World report recorded prime rents increasing or remaining static over the year to June. This represents a large increase on the previous year (66%). Around one fifth of countries (19%) saw rents falling, compared with over one third (34%) in 2010.
The report provides a barometer of the global retail market, tracking rents in the top 278 shopping locations across 63 countries. It includes a ranking, produced using the most expensive location in each of the countries.
New York’s Fifth Avenue, where rents jumped by 21.6%, retained its spot as the most expensive shopping street in the world for the tenth year running. Causeway Bay in Hong Kong remained in second place and Tokyo’s Ginza in third.
The biggest climber in the top ten was Pitt Street Mall in Sydney, Australia, which jumped from ninth place to fourth following major redevelopments. Rents in the pedestrian street leapt by 33.3% year-on-year. Despite a rental increase of 4.3%, London’s New Bond Street dropped two rankings, from fourth to sixth. The UK street falls behind Avenue des Champs-Elysées in Paris which is now the most expensive retail location in Europe having registered a rental uplift of 5.3%, compared with a decrease of 9.5% last year.
Similar to last year, the Asia-Pacific and Latin America regions lead the global growth in retail rents. In Asia-Pacific, which overall saw a rental uplift of 12.2%, Wangfujing in Beijing recorded the largest growth (109.5%) and is the biggest riser globally this year. In South America, in which rents rose overall by 10.6%, Garcia D’avilla street in Rio de Janeiro was the highest climber with a rental uplift of 52.2%.
Growth across Europe (1.9%) was considerably more restrained and - with exception of the Middle-East and Africa (0%) - lagged behind other regions. However, it bounced back from the profound decline recorded last year (4.2%). Helsinki city centre showed the strongest growth in Europe, with a rental increase of 33.3%.
John Strachan, Global Head of Retail, said, “The recovery in the West is fragile but our offices have seen enhanced levels of business, particularly in the major city centres which are on the shopping lists of many international brands. Supply is short and both rents and prices are being forced upwards. Retailers continue to expand in the Middle-East and Japan, but China, India and to some extent South America remain the focus of attention for many of the world’s leading retailers.’’
Martin Mahmuti in the EMEA Research team: “The growth in global retail markets is being supported by aggressive retailer expansion in emerging markets and fierce competition for the best and most high-profile global shopping locations amongst successful brands. We do not foresee international activity slowing down; occupier demand is expected to remain robust as retailers seek to enter new prime markets abroad rather than looking for compromised locations in their own back yards. This trend will be enhanced by multi-channel retailing whereby tertiary locations will be almost entirely replaced by on-line transactions over time.”
Gene Spiegelman, Executive Vice President, New York, said, “Fifth Avenue has once again confirmed its place as the world’s most sought-after position for the foremost international retail and fashion brands. The ability for a retail brand to interact with a large, diverse and frequently changing consumer population has allowed Fifth Avenue rental values to exceed expectations. This is especially significant given the recent global economic challenges. Global retail brands have become ever more sophisticated utilizing both traditional and social media marketing channels, however, these brands still recognize the immense value created via strategically placed “brick and mortar” retailing, for which Fifth Avenue has been acknowledged as the leading global high street.”
James Hawkey, Executive Director - Retail Services, China, said, „Retailer expansion in China continues to be rapid, with the sales of China's top 100 retailers growing at a rate of 21%. Growth in the luxury sector has been supported by strong sales. News of a potential reduction in tax on luxury goods, which would bring prices in China closer to those in Europe and America, may lead to further expansion if realised. Mid-market players such as the major international fast fashion retailers have been expanding rapidly and have achieved some early success in tier two cities. 2012 will provide an excellent environment for further rapid retail expansion in China, with high levels of new shopping centre supply in most Chinese cities.“
The report provides a barometer of the global retail market, tracking rents in the top 278 shopping locations across 63 countries. It includes a ranking, produced using the most expensive location in each of the countries.
New York’s Fifth Avenue, where rents jumped by 21.6%, retained its spot as the most expensive shopping street in the world for the tenth year running. Causeway Bay in Hong Kong remained in second place and Tokyo’s Ginza in third.
The biggest climber in the top ten was Pitt Street Mall in Sydney, Australia, which jumped from ninth place to fourth following major redevelopments. Rents in the pedestrian street leapt by 33.3% year-on-year. Despite a rental increase of 4.3%, London’s New Bond Street dropped two rankings, from fourth to sixth. The UK street falls behind Avenue des Champs-Elysées in Paris which is now the most expensive retail location in Europe having registered a rental uplift of 5.3%, compared with a decrease of 9.5% last year.
Similar to last year, the Asia-Pacific and Latin America regions lead the global growth in retail rents. In Asia-Pacific, which overall saw a rental uplift of 12.2%, Wangfujing in Beijing recorded the largest growth (109.5%) and is the biggest riser globally this year. In South America, in which rents rose overall by 10.6%, Garcia D’avilla street in Rio de Janeiro was the highest climber with a rental uplift of 52.2%.
Growth across Europe (1.9%) was considerably more restrained and - with exception of the Middle-East and Africa (0%) - lagged behind other regions. However, it bounced back from the profound decline recorded last year (4.2%). Helsinki city centre showed the strongest growth in Europe, with a rental increase of 33.3%.
| The world’s ten most expensive shopping streets 2011 | |||||||
| Rank 2011 (2010) | City | Street | US$/sq ft/year | €/sq m/year | % change | ||
| 1 (1) | New York | Fifth Avenue | 2,250 | 16,704 | +21.6 | ||
| 2 (2) | Hong Kong | Causeway Bay | 1,943 | 14,426 | +16.7 | ||
| 3 (3) | Tokyo | Ginza | 1,044 | 7,750 | +8.7 | ||
| 4 (9) | Sydney | Pitt Street Mall | 995 | 7,384 | +33.3 | ||
| 5 (5) | Paris | Avenue des Champs Elysées | 992 | 7,364 | +5.3 | ||
| 6 (4) | London | New Bond Street | 930 | 6,901 | +4.3 | ||
| 7 (6) | Milan | Via Montenapoleone | 916 | 6,800 | +0.0 | ||
| 8 (7) | Zurich | Bahnhofstrasse | 883 | 6,553 | +0.0 | ||
| 9 (8) | Seoul | Myeongdong | 635 | 4,714 | +0.6 | ||
| 10 (10) | Munich | Kaufingerstrasse | 533 | 3,960 | +6.5 | ||
John Strachan, Global Head of Retail, said, “The recovery in the West is fragile but our offices have seen enhanced levels of business, particularly in the major city centres which are on the shopping lists of many international brands. Supply is short and both rents and prices are being forced upwards. Retailers continue to expand in the Middle-East and Japan, but China, India and to some extent South America remain the focus of attention for many of the world’s leading retailers.’’
Martin Mahmuti in the EMEA Research team: “The growth in global retail markets is being supported by aggressive retailer expansion in emerging markets and fierce competition for the best and most high-profile global shopping locations amongst successful brands. We do not foresee international activity slowing down; occupier demand is expected to remain robust as retailers seek to enter new prime markets abroad rather than looking for compromised locations in their own back yards. This trend will be enhanced by multi-channel retailing whereby tertiary locations will be almost entirely replaced by on-line transactions over time.”
Gene Spiegelman, Executive Vice President, New York, said, “Fifth Avenue has once again confirmed its place as the world’s most sought-after position for the foremost international retail and fashion brands. The ability for a retail brand to interact with a large, diverse and frequently changing consumer population has allowed Fifth Avenue rental values to exceed expectations. This is especially significant given the recent global economic challenges. Global retail brands have become ever more sophisticated utilizing both traditional and social media marketing channels, however, these brands still recognize the immense value created via strategically placed “brick and mortar” retailing, for which Fifth Avenue has been acknowledged as the leading global high street.”
James Hawkey, Executive Director - Retail Services, China, said, „Retailer expansion in China continues to be rapid, with the sales of China's top 100 retailers growing at a rate of 21%. Growth in the luxury sector has been supported by strong sales. News of a potential reduction in tax on luxury goods, which would bring prices in China closer to those in Europe and America, may lead to further expansion if realised. Mid-market players such as the major international fast fashion retailers have been expanding rapidly and have achieved some early success in tier two cities. 2012 will provide an excellent environment for further rapid retail expansion in China, with high levels of new shopping centre supply in most Chinese cities.“
