CBRE: Hong Kong and New York are world’s most expensive retail destinations
London -- Hong Kong is the world’s most expensive retail destination, with retail rents at $3,864 per square foot, according to the quarterly rankings of global retail rents from global property advisor CBRE Group. CBRE cited the city’s significant inbound tourist traffic and continued increases in domestic wealth as fueling demand from international fashion and luxury retailers.
The CBRE rankings saw little change in the first quarter of 2012 compared with the previous quarter. New York retained the number two position, at $2,475 per square foot. Both New York and Hong Kong experienced significant increases in retail rents quarter-over-quarter.
The remaining top five rankings were also unchanged from the prior quarter: Sydney was third, at $1,112 per square foot, followed by Tokyo, at $1025 per square foot. London, at $956 per square foot, completed the top five as competition for prime locations in the city’s West End contributed to an annual rental increase of 5.6%.
Globally, total retail rents increased by a modest 0.8% quarter-over-quarter in the first quarter of 2012 as concerns over the eurozone debt crisis and weak global economic growth continued to affect consumer and retailer confidence. Despite these fears, occupier demand for prime space in many major cities remained strong, and prime space was in short supply in many markets.
“Despite concerns over the eurozone and a slowing world economy, retailer demand for prime space in major cities remains strong; however, prime space is in short supply in many markets,” said Ray Torto, global chief economist, CBRE, in a statement.
This mismatch between demand and supply means that activity levels are not as high as they could be. Equally, retailers continue to target the best locations in the more mature markets of Western Europe and the wealthier markets in the Asia Pacific region.