According to new data from CBRE Group Inc., Hong Kong and New York City rank number one and two as the world's most expensive prime retail markets during the third quarter. Hong Kong retailers paid approximately $4,334 per square foot per annum during the quarter, while New York's retailers paid an average of $2,925 per square foot per annum.
The retail mix in Hong Kong's key retail precincts of Central, Causeway Bay and Tsim Sha Tsui continue to be dominated by the luxury segment, according to CBRE Group. But gains were witnessed particularly in New York City, where rents on Fifth Avenue increased 17% quarter-over-quarter.
‘We are continuing to see strong demand and price velocity on the very best retail corridors in gateway cities, particularly in Manhattan, where every brand must be located in order to legitimately claim a 'global' identity,’ says Anthony Buono, executive managing director of CBRE's Americas Retail Services. ‘Fifth Avenue, Madison Avenue, Times Square and to an increasing extent, Soho and the Meatpacking districts are destinations for global shoppers. However, core rents are reaching new heights, and retailers are compelled to reach new heights to acquire space.’
Rounding out the top 10 list of highest-priced markets for retail rents were Tokyo, Sydney, London, Melbourne, Zurich, Paris, Moscow and Brisbane.
‘Cities with international reputations for luxury shopping are especially in demand,’ says Ray Torto, global chief economist at CBRE. ‘Given the limited supply of prime space throughout these locations, prime rents will remain high in the foreseeable future.’