CBE and Cushman & Wakefield both report that rents in the global retail sector grew more in the past year than in any other commercial property sector. The growth, however, was slight and experts believe it was likely driven by a lack of development in the retail sector combined with an uptick in demand. Growth in the Americas was the most prominent with expensive retail locations like 5th Avenue in New York City leading the way. Causeway Bay in Hong Kong, however, held the top spot for the most expensive shopping district in the world. For more on this continue reading the following article from National Real Estate Investor.
Although tepid, retail rent growth on a global basis over the past year has been stronger than that of any other commercial property type, according to research released by real estate services firm CBRE.
CBRE’s Global Retail Rent Index rose 4 percent on an annual basis and 1 percent on a quarterly basis in the third quarter of 2013. During the same period, office rents remained flat and industrial rents rose less than 1 percent.
CBRE researchers attributed stronger retail rent growth to lack of new development and more robust demand from retailers for new space.
Another global real estate services firm, Cushman & Wakefield, estimates that global retail rents rose 3.2 percent over the past 12 months, slowing down from 4.5 percent growth in 2011/2012. The Americas region experienced the strongest growth in retail rents in prime locations, at 5.8 percent. Four of the top five most expensive retail streets in the Americas were in New York, including Fifth Avenue, Times Square, East 57th Street and Madison Avenue.
Causeway Bay in Hong Kong held on to its spot as the most expensive retail street in the world, with rents of $3,017 per sq. ft. per year, the first time in the World’s Most Expensive Shopping Streets report history that a street broke the $3,000 per sq. ft. barrier. It also experienced year-over-year rent growth of 14.7 percent in local currency.
New York’s Fifth Avenue came in at number two, with average rent of $2,500 per sq. ft. per year, but flat year-over-year growth.
Avenue des Champs Elysees was third, with rents of $1,601 per sq. ft. per year. Paris’s famous thoroughfare also experienced the highest increase in rents year-over-year, at 38.5 percent.
This article was republished with permission from National Real Estate Investor.