Hong Kong, New York, Paris, London, and Tokyo remained the world's most expensive high-street shopping destinations in Q3 2014, according to new research from CBRE Group. dollar plus qatar
In the third quarter of 2014, CBRE's quarterly ranking of the world's top global retail markets remained unchanged, with global and hot-growth markets continuing to lead the list. Retailers continue to focus on high-end shopping centers and foreign visitors in all regions.
"Consumer demand is relatively firm in most countries, despite the very bleak economic headlines," said Richard Barkham, CBRE's Global Chief Economist. "We should expect the post-crisis trend of periods of optimism accompanied by periods of pessimism to continue." The Americas will rise faster than the Eurozone, which has been hampered by banking sector consolidation as well as overly tight fiscal and monetary policy. "Asia Pacific's growth will be marginally lower in 2014 than in 2013, but it will still outpace the other two regions by a significant margin."
Hong Kong (US$4,327 per sq. ft. per year) held a significant lead over New York (US$3,570 per sq. ft. per year)—where prime rent along Fifth Avenue is at record highs. In comparison to Q2 2014, Hong Kong rents remained constant.
The "Occupy Central" movement, which started late in the third quarter, has had no significant effect on retail rents in Hong Kong, according to Henry Chin, CBRE's Asia Pacific Head of Research. "In October, we saw lower shopper footfall in impacted areas; however, the Christmas shopping season will help retail sales in the fourth quarter."
There is also a significant rental gap between New York and the two most important European markets: Paris ($1,331 per sq. ft. per year) and London ($1,328 per sq. ft. per year). The disparity between the top four and the rest of the top ten markets has widened dramatically.
Although the top four cities have maintained their dominance, there has been some movement in the top ten rankings. Rents in Tokyo (US$1,076 per sq. ft. per annum) increased while falling in Zurich ($895 per sq. ft. per annum) and Sydney (US$730 per sq. ft. per annum), causing the cities to swap places this quarter.
Tokyo continued to lead Asia Pacific rental growth in Q3 2014, with a shortage of space in major high-street retail locations driving retail rents up 7.7% quarter-over-quarter. Strong rental growth was also reported in a number of emerging markets in the region, especially in India and Vietnam, indicating the recent resumption of structural economic reforms after a period of stagnation. A solid 5.9% quarter-over-quarter rental growth in Ho Chi Minh City and a 4.0 percent quarter-over-quarter rental growth in Mumbai were among the highlights.
Retailer demand for prime locations in major cities across EMEA remained strong, but rental growth slowed in the third quarter of 2014, leaving most markets flat. Hamburg (up 6.5 percent quarter-over-quarter) and Munich (up 5.6 percent quarter-over-quarter) were two of the few markets to rise, indicating that, amid recent economic news, German domestic demand remains strong.
During the third quarter of 2014, prime rents increased in four of the 12 prime retail corridors monitored by CBRE Research in the United States. Prime asking rents along Rodeo Drive in Los Angeles (US$640 per sq. ft. per annum) remain the highest in the United States outside of Manhattan, and are projected to rise further in 2014 due to a scarcity of available rooms. In Q3 2014, prime asking rents in Miami (up 3.2 percent quarter-over-quarter), Washington, D.C. (up 2.2 percent quarter-over-quarter), and New York (up 2.0 percent quarter-over-quarter) all increased. In Montreal, Vancouver, and Toronto, high-street rents remained unchanged in Q4 2013, and have remained at their current pace since then.