Hong Kong is by far the world’s most expensive city for global retailers, but prime rents in New York, London, Tokyo and Zurich are on the rise, according to new research from CBRE Group, Inc.
CBRE’s quarterly ranking (Q2 2013) of the top 10 prime global retail markets saw little change relative to previous quarters; however, four of the top 10 markets — New York, London, Zurich and Tokyo — saw quarterly increases in prime retail rents, compared with only one market during the previous quarter.
Historically low construction levels and fierce retailer competition for the best locations is fuelling this growth, leading to record-breaking rents in many global markets.
“Global retailers continue to desire premier retail locations in gateway cities because of the global shoppers those corridors attract and the value delivered for brand visibility,” said Anthony Buono, executive managing director, Americas Retail Services, CBRE. Hong Kong (at $4,328 psf per annum) tops the rankings by a substantial margin, with New York ($3,050 psf per annum) in second position. Similarly, a large spread of more than $1,800 psf per annum exists between New York and third-ranked Paris ($1,220 psf).
Despite its high rents, retailers continue to establish a presence in Hong Kong, seeking to benefit from the market’s growing luxury retail scene.
According to CBRE research, 51 new retailers opened stores in Hong Kong last year and the city has the highest representation of luxury retailers of all global markets.
Joe Lin, executive director retail, Hong Kong, CBRE, said, “Units in prime locations with reasonable shop fronts and size rarely become available, leaving retailers with few choices. As such, preference for spaces with these characteristics continues to generate strong demand, supporting the market’s high – and rising – prime rent levels.”
