Hong Kong has the world’s most expensive prime retail space, according to new research from CBRE Group.
CBRE’s global quarterly ranking of 97 prime retail markets shows luxury retailers are willing to pay record rents, resulting in strong competition in leading cities.
At $4,334 U.S. per-square-foot per annum, Hong Kong’s prime retail rents out-price the other markets by a substantial amount. New York had the next highest rents at $3,300 U.S per-square-foot per annum, followed by Paris ($1,452) and London ($1,354).
“There has been a lot of discussion about the strength of luxury retailers versus those that serve the mid-market,” says Raymond G. Torto, global chairman of research at CBRE. “CBRE’s research provides further evidence that prime retail rents are strong in most markets and rose further in key global markets like New York, London and Tokyo.”
Retail rents in prime locations have been driven up by a shortage of available space in areas with high demand. Retailers demanded prime locations over secondary streets, a trend that Torto expects will continue in 2014.
Hong Kong’s most sought-after streets — Russell Street in Causeway Bay, Canton Road in Tsim Sha Tsui, and Queen’s Road Central in Central — continue to attract global and local retailers despite tight vacancy rates.
Meanwhile, asking rent on New York’s Fifth Avenue hit an all-time high in the fourth quarter of 2013, reaching $3,300 per-square-foot per annum. This marked a 4.8 per cent quarter-over-quarter increase.
Interest in prime Paris retail locations from international retailers has resulted in the city’s average prime asking rent rising 80 per cent since the first quarter of 2012.
