High street rents go, well, sky-high
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.