Magazines Archives - 2011 Jan

NYC still world’s most expensive retail market
Story 8 - Property Update

Despite the economic quagmire that has enveloped much of the US, New York City continues to dominate as the world’s most expensive retail market, with prime rents at US$1,800psf per annum, according to CB Richard Ellis’ (CBRE) latest Global Retail MarketView.

The report placed Sydney in second place globally (from third in Q2 2010, at US$1,218psf per annum) and Hong Kong ranked third (US$1,113psf per annum). London remains in fourth place, after recording a 20% annual increase in retail rents year-on-year (now US$891psf per annum) and Tokyo rounds out the top five locations (US$804psf per annum).

Prime retail rents in the world’s leading retail destinations have stabilised, with some markets now witnessing rental growth as the economic recovery gathers momentum and consumer confidence starts to improve, according to CBRE. Demand for prime retail space in most markets remains strong, with some cities seeing substantial annual growth at the end of Q3 2010.

Prime retail rents globally increased by 0.2% from the second quarter to the third quarter of 2010. Rents on a y-o-y basis grew in three of the major global regions, with the Americas seeing the highest rental increase (6% y-o-y), Asia following with a 4% increase, and the Pacific region growing by 3% y-o-y.

In contrast, rents in Europe, Middle East and Africa (EMEA) fell by 3% y-o-y in Q3 2010, largely due to the effects of the economic downturn in markets including Spain, Ireland and Greece. However, rents remained largely stable in most EMEA markets in Q3 and some cities have seen significant annual rental growth, with Edinburgh and London growing by 25% and 20% respectively compared to the same period in 2009.

Asian retail markets have benefited from the regional economic upswing and continued to strengthen and diverge across mature and emerging markets in the region in Q3 2010, said CBRE. The average prime rent stabilised and in some markets saw a minor uptick, most notably in Shanghai, Beijing, Guangzhou, Toyko, Taipei and Hong Kong.

Nick Axford, CBRE’s executive director, head of research, Asia, commented: “Demand for prime retail space is very strong across the Asian markets given the robust retail spending backed by the continuous improvement of unemployment rates and household incomes in the region. In China, the upbeat consumer sentiment is most prevalent in Shanghai and Guangzhou, thanks to the Shanghai World Expo and the Guangzhou Asian Games. Meanwhile, Hong Kong continues to benefit from the strong influx of Chinese mainland tourists. These factors collectively pushed up the retail rents for prime retail space.”

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