The world's top retail locations are on an upward trend again
28 September 2010
Two thirds of all worldwide retail sales locations analysed report rising, or at least stable prime rents - Munich's Kaufingerstrasse still in the Top 10 - Zurich's Bahnhofstrasse and Vienna's Kärntnerstrasse hold their own in places 7 and 12.
After a stormy 2009, which was always under the cloud of the global economic crisis, the world's most important retail locations are now sailing in calmer waters. While the past year saw the largest rent declines of the last quarter century, most of the markets are now starting on an upward trend. 41% of the most expensive retail locations in the 59 countries analysed report rising rents, while a further 25% show stable prime rental rates.
In the latest survey "Main Streets Across the World" from Cushman & Wakefield (C&W), Fifth Avenue in New York (Euro 1,355 per m²/month gross) and Hong Kong's Causeway Bay (Euro 1,218 per m²/month gross) are still holding the top places in the international ranking list of the world's most expensive sites. In third place Tokyo's Ginza some way behind with Euro 643 per m²/month gross. For the first time in many years, the Avenue des Champs Elysées in Paris is outside the Top 3. France's prime location registered the highest rent decline out of the Top 10, with 9.5 % negative. With a current prime rent of Euro 580 per m²/month gross, it could only manage fifth place. London's New Bond Street was able to advance two places in the global comparison, overtaking the Avenue des Champs Elysées. New Bond Street now shows a top rent of Euro 612 per m²/month gross, climbing to fourth on the list, to become Europe's most expensive retail location.
" For the top 10 ranking for the world's most expensive retail locations, see pages 67"
In contrast to 2009, the majority of the ten most expensive retail locations can once again report rising rents. Looking at the rent price increase, New Bond Street is out in front with an increase of 19.4%, followed by Myeongdong in Seoul with 17.8% and Causeway Bay in Hong Kong with 9.6%. And after a minus of 8.1% in the previous year, the top rental figure for Fifth Avenue rose again by an impressive 8.8%. The world's most expensive retail location was able to hold onto its top position, in spite of the pressure which it is still experiencing from the continuing economic turbulence, particularly in the USA. The Tourist Destination New York continues in its role as "THE" Marketing Platform. Anyone who wants to present or reposition their brand worldwide selects Fifth Avenue as their key site and is then prepared to pay the corresponding top rates", says Inga Schwarz, Research Manager for C&W Germany.
Established markets hold their own - but new markets offer the highest growth prospects
"The road from crisis to greater stability and growth has been pretty rocky up to now, and the consequences of the worldwide recession are still painfully evident in the retail property markets"- the view of John Strachan, Global Head of Retail at C&W. "Particularly in the established markets, retailers are continuing to act with great caution. People were very selective about agreeing new rental deals. In spite of that: in the world's main selling streets, such as in London and New York, the demand for space is again way over the amount available. The prime rental rates have stabilized, and have begun to rise again in the last few months. The latest figures have quite clearly confirmed this trend." However, the researchers from C&W see the biggest market movements and the greatest growth opportunities in the "new" markets, the so-called emerging nations. Here, the forecast is for a distinct rise in the demand for top quality premises in the most important key retail streets. In this context, the best prospects have been evidenced in the Asia-Pacific region.
Greatest volatility in new markets - continuing decline in demand for subsidiary sites
The highest increase in rents, with a rise of 92% was noted for Rua Haddock Lobo in Sao Paolo (Brazil). The biggest decline of rental prices was also recorded for an emerging market: in Alexander Batenbeg in Plovdiv (Bulgaria) the prime rent fell during the last twelve months by 50%. In the Asia-Pacific region, a remarkable increase in rental price of 33% was achieved in Linking Road in Mumbai. Such a wide range of rental price fluctuations has not been observed in established markets. On a worldwide basis, it has been observed that the demand for retail space in subsidiary sites is still low, and often on the decline. Falling rental prices are by no means rare in such locations. And when the chips are down, international retailers can often work fast: unprofitable businesses are closed, and where necessary the expansion rate can be throttled back.
Bahnhofstrasse in Zurich, Munich's Kaufingerstrasse and Kärntnerstrasse in Vienna are still the most expensive shopping streets in the German-speaking region
In September 2010, Kaufingerstrasse in Munich was still the most expensive retail site in Germany. In spite of the considerable economic upheavals, it was above all the high demand from international retailers that pushed the prime rental rate during the year up to Euro 310/m²/month gross, an increase of 3.3%. This means that Kaufingerstrasse was able to win a place in the Top 10 for the second year in succession. Furthermore, the top locations in the German retail zones are still occupied by Am Zeil in Frankfurt, with Euro 270 per m²/month gross and Königsallee in Düsseldorf with Euro 230 per m²/month gross.
"For rankings of the most expensive retail locations in the German-speaking region, see page 7"
As in preceding years, Bahnhofstrasse in Zurich has been successful in holding onto its seventh place in the global ranking (Euro 502 per m²/month gross) making it the most expensive shopping thoroughfare in the whole of the German-speaking region. Vienna's Kärtnerstrasse also managed to hang onto its position, and with a top current rental rate of Euro 267 per m²/moth gross, it is still in sixth place.
Moderate Growth rates for 2011
According to Inga Schwarz: "The world economy is not yet fully back on course for growth and stability. Fear of a double-dip recession is still noticeable in the markets - supported by significant indicators which counsel caution. Accordingly, some retailers are acting with circumspection. Nevertheless, we are assuming that we will be able to record some moderate price increases for the world's most important retail locations during 2011. The markets will continue to show movement. Not least, because quite a number of retailers have had the entrepreneurial courage to secure some very good rental sites for attractive rent conditions during the bottoming-out period. These will be the traders who will make the biggest profits from the upturn, once growth has re-established itself."
For its annual international retail report, Cushman & Wakefield investigates the most important retail sites of the world. In the current year 269 locations were analysed in 59 countries.
The world's most expensive top 10 retail locations in 2010
|
Rank 2010 |
Rank 2009 |
Country |
City |
Street |
Grosss Euro/m²/ |
|
1 |
1 |
USA |
New York |
Fifth Avenue |
1.355 |
|
2 |
2 |
Hong Kong |
Hong Kong |
Causeway Bay |
1.218 |
|
3 |
5 |
Japan |
Tokyo |
Ginza |
643 |
|
4 |
6 |
UK |
London |
New Bond Street |
612 |
|
5 |
3 |
France |
Paris |
Avenue des Champs Elysées |
580 |
|
6 |
4 |
Italy |
Milan |
Via Montenapoleone |
564 |
|
7 |
7 |
Switzerland |
Zurich |
Bahnhofstrasse |
502 |
|
8 |
11 |
South Korea |
Seoul |
Myeongdong |
404 |
|
9 |
10 |
Australia |
Sydney |
Pitt Street Mall |
343 |
|
10 |
9 |
Germany |
Munich |
Kaufingerstrasse |
310 |
Source: European Cities Monitor 2010 - Cushman & Wakefield
Germany's most expensive retail locations in 2010
|
City |
Location |
Gross Euro/m²/month |
|
Munich |
Kaufingerstrasse |
310 |
|
Frankfurt |
Zeil |
270 |
|
Dusseldorf |
Königsallee |
230 |
|
Stuttgart |
Königstrasse |
225 |
|
Berlin |
Tauentzienstraße (South) |
220 |
|
Cologne |
Schildergasse |
220 |
|
Hamburg |
Mönckebergstrasse |
220 |
|
Leipzig |
Peterstrasse |
115 |
|
Essen |
Kettwiger Strasse |
105 |
|
Dresden |
Pragerstrasse |
90 |
Source: European Cities Monitor 2010 - Cushman & Wakefield
The most expensive retail locations in the German-speaking region during 2010
|
City |
Location |
Gross Euro/m²/month |
|
Zurich |
Bahnhofstrasse |
502 |
|
Munich |
Kaufingerstrasse |
310 |
|
Frankfurt |
Zeil |
270 |
|
Vienna |
Kärntnerstrasse |
269 |
|
Geneva |
Rue de Rhone |
251 |
|
Dusseldorf |
Königsallee |
230 |
|
Stuttgart |
Königstrasse |
225 |
|
Berlin |
Tauentzienstrasse (Süd) |
220 |
|
Hamburg |
Mönckebergstrasse |
220 |
|
Cologne |
Schildergasse |
220 |
|
Bern |
Marktgasse/Spitalgasse |
188 |
|
Basel |
Freiestrasse |
176 |
|
Vienna |
Mariahilferstrasse |
135 |
|
Salzburg |
Getreidegasse |
120 |
|
Leipzig |
Peterstrasse |
115 |
|
Linz |
Landstrasse |
115 |
|
Graz |
Herrengasse |
105 |
|
Essen |
Kettwiger Strasse |
105 |
|
Innsbruck |
Maria Theresienstrasse |
95 |
|
Dresden |
Pragerstrasse |
90 |
Source: European Cities Monitor 2010 - Cushman & Wakefield
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Cushman & Wakefield is the world's largest privately-held commercial real estate services firm. Founded in 1917, it has 230 offices in 60 countries and more than 13,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies. It offers a complete range of services within five primary disciplines: Transaction Services, including tenant and landlord representation in office, industrial and retail real estate; Capital Markets, including property sales, investment management, investment banking, debt and equity financing; Client Solutions, including integrated real estate strategies for large corporations and property owners, Consulting Services, including business and real estate consulting; and Valuation & Advisory Services, including appraisals, highest and best use analysis, dispute resolution and litigation support, along with specialized expertise in various industry sectors. A recognized leader in global real estate research, the firm publishes a broad array of proprietary reports available on its online Knowledge Center at www.cushmanwakefield.de. In Germany C&W is located in Frankfurt (headquarters), Berlin, Dusseldorf, Munich and Hamburg.