Despite plummeting retail rents in Hong Kong, Causeway Bay has retained its ranking as Asia’s most expensive retail strip – and the world’s second, behind Upper 5th Avenue in Manhattan, New York.
Soaring London rents have seen New Bond Street rise to become the world’s third most expensive retail street, according to an annual survey by Cushman & Wakefield.
The annual Main Streets Across The World report, now in its 29th edition, tracks 451 of the top retail streets around the globe and ranks the most expensive in 68 countries and regions by prime rental value using Cushman & Wakefield’s proprietary data.
Only three Asian cities feature in the top 10 globally, with Tokyo’s Ginza in sixth place, down one place from last year, and Myeongdong in Seoul eighth, its same ranking as before.
The Top 10 list is as follows:
Average annual rents on Upper 5th Avenue stayed the same as last year at US$3000 (HK$23,400) per square foot. Despite a 4.7 per cent fall to US$2725 (HK$21,255) psf/yr, Hong Kong’s Causeway Bay retained its second place and Cushman & Wakefield observed the rental correction in the district “is almost complete” nearing the year’s end.
London’s New Bond Street leapt into third place as rents increased by more than a third (in local currency) on the previous year to US$1720 psf/yr.
Report author Darren Yates, head of EMEA retail research with Cushman & Wakefield, said that despite a lot of negative headlines, global retail remains as dynamic and vibrant as ever in response to technological and demographic change across the world.
“Premium retail destinations, including Upper Fifth Avenue, Causeway Bay and New Bond Street, are highly sought after by international brands seeking to create engaging retail experiences that offer something new and exciting. The most innovative retailers are combining their online and physical platforms to create a seamless omni-channel experience for the customer, but profile and location play such a crucial role in the premium retail experience,” he said.
Rents “will be better”
Kevin Lam, Cushman & Wakefield’s executive director, head of retail services in Hong Kong , said that while rents eased in causeway Bay during this year, the pace of decline has slowed in the second half and the correction is expected to finish towards year-end.
“Rents in Causeway Bay will be in a better position next year, although there will still be some distance between the rents of Causeway Bay and of Upper 5th Avenue in New York,” he said.
“Ranking at second place globally reflected a softening of high street rents in Causeway Bay, but the plus side is this healthy correction has driven greater diversification in trade mix on the high street. Apart from the luxury trades which have always been dominant in Causeway Bay, there are more lifestyle merchandise, food and beverage and Mainland China brands entering the district, which would enhance the shopping experience for customers.
“As cases of duplex and triplex leasing become rarer, we expect the number of varieties of shops will increase.”
Meanwhile, Mainland China’s retail market continues to evolve as a rapidly growing consumer base of savvy, brand-aware shoppers seek out new and sophisticated retail experiences. Beijing’s Wangfujing is ranked 11th in the global table, with annual rents at $477 psf/yr. The city’s online retail market has experienced exceptionally strong growth and internet sales now account for about 18 per cent of the total, although 12.4 million sqft of new space is expected to become available in the Fengtai and Tongzhou districts in 2018 as new developments complete.