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New York's Fifth Avenue tops the ranking of the world's most expensive shopping locations
14 Nov, 2007, Global
New York retains its title as the world’s most expensive shopping destination in this year’s edition of Main Streets Across the World, the annual publication by global real estate consultant, Cushman & Wakefield.
An average 1,000 sq ft/93 sq m unit on at Fifth Avenue’s most expensive stretch, along the golden corridor between the junctions with 49th and 59th Street, now costs around US$1.5mn a year, up 11 per cent on last year.
Main Streets Across the World (MSATW) is this year launched at MAPIC, the international market for retail real estate taking place in Cannes, France, on 14-16 November. The report tracks retail rents in the world’s top 231 shopping locations across 44 countries. The global league table is drawn up by taking the most expensive location in each of the countries monitored.
John Strachan, Cushman & Wakefield’s Global Head of Retail, comments: "We are seeing the emergence of a line-up of global shopping destinations, whether Fifth Avenue in New York, Causeway Bay in Hong Kong or Avenue Champs-Elysées in Paris, where retailers are using flagship stores in prestige locations to leverage the value of their brands. These locations are not just attracting local shoppers, but shoppers from around the world, whose very reason to travel is quite often to shop, while the driving force in many of the Asia Pacific locations is also the emergence of a middle class with money in their pockets."
Regarding New York’s Fifth Avenue, Gene Spiegelman, Executive Director of Cushman & Wakefield in New York, says: "Fifth Avenue has maintained its dominant position as the world-class destination for global brands looking to establish a retail presence. Occupiers are willing to pay record-setting rents to secure retail positions on the stretch of Fifth Avenue from 49th Street to 59th Street. Retail rents for ground floor space on Fifth Avenue have doubled in the past five years, from US$750 to US$1,500 per square foot, culminating with Gucci’s lease of more than 40,000 square feet at 725 Fifth Avenue at the end of 2006."
THE WORLD’S MOST EXPENSIVE SHOPPING STREETS
Source: Cushman & Wakefield
The world ranking sees little movement at the top, with Hong Kong (Causeway Bay) retaining its second place and Paris (Avenue des Champs Elysées) its third place. Khan Market in New Delhi, the most expensive destination in India, is the biggest riser in this year’s ranking, after also being the biggest riser last year; in the 2005 edition of MSATW, Khan Market was 41st, last year it moved to 24th and this year it has risen to 16th.
Rajneesh Mahajan, National Head, Retail, Cushman & Wakefield India, says: “Retail is going through a revolution in India, although part of the increase in rents is due to the lack of high-quality space in the right location. This is in strong contrast to other emerging markets such as China, where rental growth has been mainly driven by increasing demand from both domestic and international retailers due to restrictive legislation being lifted in the past few years as part of China’s obligations towards the World Trade Organisation.”
The Khan Market district in New Delhi is located in the heart of a premium residential pocket, housing diplomats, industrialists, civil servants and high-net worth individuals. The area offers a mix of local and international brands, including Nike, Benetton, Swarovski, McDonald’s, Barista and Bandhej, among others.
Globally, Chicago’s Oak Street was the location with the biggest rental increases in local currency. Here, rents for prime properties have doubled in one year. Jim Downey, Senior Director, Retail Services of Cushman & Wakefield in the US, explains: “Oak Street has become a very desirable place for retail. Not only is there a limited availability, but the openings of Graaf, Harry Winston, David Yurman have taken the whole street more up market.”
Regarding the way ahead, John Strachan says: “We are seeing no signs of let-up in the demand for the right space in the right location, despite the anticipated slowdown in the global economy for 2008. Retailers are continuing unabated with their aaggressive drive into new markets, both mature and emerging. This in turn is helping to support and, indeed, increase rents in key retail locations around the world, where availability is tight and turnover of units is limited.”
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Notes to Editors:
1. Main Streets Across the World is based on data collected in June 2007 from Cushman & Wakefield’s offices around the world. The data relates to the rent obtainable on a standard unit (frontage of six metres and depth of 25 metres) in a prime pitch.
2. Cushman & Wakefield is one of the world’s largest commercial real estate services firms. Founded in 1917, the firm has 215 offices in 56 countries, and 12,000 talented professionals. Cushman & Wakefield delivers integrated solutions by actively advising, implementing and managing on behalf of landlords, tenants, lenders and investors through every stage of the real estate process. These solutions include representing clients in the buying, selling, financing, leasing and managing of assets. The firm also provides valuation advice, strategic planning and research, portfolio analysis, and site selection and space location assistance, among many other advisory services. To find out more about Cushman & Wakefield, please visit www.cushmanwakefield.com.