Hong Kong continues to be the most expensive city for retailers but prime retail rents in New York, London, Zurich, Switzerland, and Tokyo are on the rise, according to CBRE’s quarterly ranking of the top 10 prime global retail markets.

Growth in these cities is being fuelled by historically low construction levels and retailer competition for the best locations.

“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,” says Anthony Buono, executive managing director of Americas retail services at CBRE.

Hong Kong tops the rankings by a substantial margin ($4,328 US per square foot per annum), with New York in second position posting prime rents of $3,050 US per square foot per annum, $1,200 per square foot below Hong Kong. London, Zurich and Tokyo trail the top two, posting prime rates of $1,156 US, $896 US and $864 US per square per annum, respectively.

Despite Hong Kong’s high rents, retailers continue to expand into the market, particularly the luxury retail scene. CBRE reports 51 new retailers opened stores in Hong Kong last year. The city also has the highest representation of luxury retailers of all global markets.

“Healthy tourist arrivals and lack of available space make finding an adequate unit in Hong Kong’s prime retail locations a major challenge for new and existing retailers,” says Joe Lin, executive director of retail in the Hong Kong office of CBRE. “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.”