High street rents go, well, sky-high
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Current retail thinking that the high and the low ends are driving the industry has gotten a boost from CBRE Group.
High street rents are off the charts worldwide, according to company’s just-released Global Retail Rents report. Rents in prime shopping locations during the second quarter were up 30% in Rome, 24%, 20% in Milan, and 14% in Sydney and New York.
New York’s Fifth Avenue remained the prime of “The Prime,” with an average per-sq.-ft. rent of $4,000. Next in CBRE’s tally came Hong Kong’s Russell Street at $1,856, London’s New Bond Street at $1,684, and Paris’s Avenue des Champs-Elysees at $1,366.
Interestingly, rents on Russell Street posted the biggest decline from second quarter 2015, plummeting 33%. The reason, according to CBRE: Fewer tourists from Mainland China and economizing locals.
“The cooling-off of China’s economy has manifested itself in sharply lower rents in Hong Kong, which has allowed a new crop of retailers to enter the coveted city,” said Anthony Buono, chairman of CBRE’s Global Retail Executive Committee. “At the same time, prime retail rents in New York can remain stable, but in the near term we will see more landlord concessions to accomplish rate stability.”
Rents on New Bond Street are like to keep rising, Buono added, due to a scant supply of prime retail space in London.
Questions & Answers
Q.Which specific streets in prime global retail locations have the highest average rents?
Which specific streets in prime global retail locations have the highest average rents?
New York's Fifth Avenue has the highest average rent at $4,000 per square foot. Hong Kong’s Russell Street follows at $1,856, then London’s New Bond Street at $1,684, and Paris’s Avenue des Champs-Elysees at $1,366.
Q.Which global prime retail location saw the biggest decline in rents during the second quarter?
Which global prime retail location saw the biggest decline in rents during the second quarter?
Rents on Hong Kong’s Russell Street posted the biggest decline from the second quarter of 2015, plummeting 33%. This was attributed to fewer tourists from Mainland China and economising locals.
Q.Why are rents on London's New Bond Street expected to keep increasing?
Why are rents on London's New Bond Street expected to keep increasing?
Rents on New Bond Street are likely to keep rising due to a scant supply of prime retail space in London. This limited availability drives up the cost for retailers looking for coveted locations.
Q.What is impacting retail rents in New York, despite them remaining stable?
What is impacting retail rents in New York, despite them remaining stable?
Although prime retail rents in New York can remain stable, the near term will see more landlord concessions. This is to achieve rate stability, suggesting underlying pressures despite the stable appearance.
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