High-street Retail Rents Hold Firm in Q3 2014
December 22, 2014, Beijing – Hong Kong, New York, Paris, London and Tokyo retained their positions as the world’s most expensive high-street retail destinations with Beijing once again ranked amongst the top 10 in Q3 2014, according to the latest research from global property advisor CBRE Group, Inc.
CBRE’s quarterly ranking of the world’s prime global retail markets saw little change in Q3 2014, with global and hot-growth markets continuing to lead the list. Retailers across all markets continue to target high-end shopping areas and international tourists.
“Even with the somewhat gloomy economic headlines, consumer demand is reasonably firm in the majority of markets,” said Henry Chin, Head of Research, Asia Pacific, CBRE. “As the leading Asian city, Hong Kong continued to realize expansion of high-end retailers especially local jewelry dealers as well as the surging number of new retailers, who for the long term will support ongoing strength of local retail rents.”
Hong Kong (US$4,327 per sq. ft. per annum) maintained a wide lead over the number-two market, New York (US$3,570 per sq. ft. per annum)—where we find prime rent rates along Fifth Avenue at record levels. At the other end of the top 10 list we find Beijing’s average rental rate (US$672 per sq. ft. per annum) has exceeded Melbourne, moving its position up a notch to 9th on the list.
“While the sale of luxury goods in China has been waning, overall retail sales growth remains in the 10% range year on year since the start of 2014,” said Hsiang-Yun Chu, Senior Director, Retail Services, CBRE China. “With the number of visitors from Mainland China continuing to demonstrate strong growth, Japan and South Korea performed well this quarter while the regional tourism market remained robust.”
In Q3 2014, Tokyo continued to lead Asia Pacific rental growth, with the enduring shortage of space in major high-street retail locations pushing up retail rents 7.7% quarter-over-quarter. Impressive rental growth was also recorded in a number of the region’s emerging markets, particularly India and Vietnam, reflecting the current renewal of structural economic reforms following the general lack of progress experienced over the past few years. Highlights included strong 5.9% quarter-over-quarter rental growth in Ho Chi Minh City and 4.0% quarter-over-quarter rental growth in Mumbai.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
