Hong Kong’s Causeway Bay Returns to the Top as World’s Most Expensive Retail Street

• New York’s Upper 5th Avenue slips to second after significant rental
  decrease
• London’s New Bond Street the most expensive
  European city and third globally
• 30^th edition of Cushman &
  Wakefield’s annual global report shows new trends in changing retail sector

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HONG KONG, CHINA - Media OutReach - 14 November 2018 – For the first time in five years, Hong
Kong’s Causeway Bay has replaced New York’s Upper 5th Avenue as the world’s
most expensive retail street by rental value, according to data from Cushman
& Wakefield.

 

The annual ‘Main
Streets Across the World’ report, now in its 30th year, tracks 446 of the top
retail streets around the globe, ranking them by their prime rental value as at Q2 2018 according to Cushman & Wakefield’s proprietary data, which
includes a list of the most expensive streets in 65 countries/regions.

 

Despite a small
decline of 1.5% in average rents, Hong Kong’s Causeway Bay area takes
top spot, with a figure of US$2,671 (HK$20,952[1]) psf/yr. Kevin Lam, Cushman & Wakefield’s Head
of Retail Services, Hong Kong, said, “The retail market in Hong Kong
has experienced a rebound over the last year, driven mainly by a return of
mainland Chinese tourists. With encouraging signs in tourist arrivals and
retail sales during the first half of 2018, especially in the watch and
jewellery category, luxury brand operators have shown interest in re-entering
the market, if opportunities arise in good locations. However, the outlook for
the market towards the final quarter is clouded by growing trade tensions and
weakened price advantage of Hong Kong in view of external factors.”

 

A significant decline in rents by 25.0% in view of increased
vacancy has seen Upper 5th Avenue in New York slip back to second place
globally, with average rents at US$2,250 psf/yr compared with US$3,000 in the previous 12-month period. London’s New Bond Street
meanwhile is the most expensive European location, in third place globally,
with rents broadly flat year-on-year at US$1,744 psf/yr, underlining the fact
that luxury and high-end retailers still see the UK’s capital as a key retail
destination. Elsewhere in the top 10, the Avenue des Champs Élysées is in
fourth place (US$1,519 psf/yr), with Milan’s Via Montenapoleone in fifth
position (US$1,466 psf/yr). Tokyo’s Ginza is the second highest-ranked Asian street, with rents on average costing (US$1,219 psf/yr). Streets in emerging
markets in Africa and Latin America account for most of the locations at the
other end of the ranking, with rents as low as US$20-30 psf/yr.

 

TOP 10 MOST EXPENSIVE LOCATIONS BY COUNTRY (source: Cushman & Wakefield)
Rank 2018	Rank 2017	Location	City	Rent US$/SQ FT/YEAR
1	2	Causeway Bay (Russell Street)	Hong Kong	2,671
2	1	Upper 5th Avenue (49th – 60th Streets)	New York	2,250
3	3	New Bond Street	London	1,744
4	5	Avenue des Champs Élysées	Paris	1,519
5	4	Via Montenapoleone	Milan	1,466
6	6	Ginza	Tokyo	1,219
7	7	Pitt Street Mall	Sydney	964
8	8	Myeongdong	Seoul	908
9	9	Bahnhofstrasse	Zurich	854
10	10	Kohlmarkt	Vienna	515

 

Report author Darren Yates, Head of EMEA Retail Research
at Cushman & Wakefield, said: “The
first edition of the Main Streets report in 1988 showed New York’s East 57th
Street was the world’s most expensive high street at US$425 psf/yr. Since then
the number one spot has been dominated by streets in either New York or Hong
Kong, with only Tokyo’s Ginza outside these able to achieve this.”

 

Kevin Lam added, “For Hong Kong as well as
other main streets across the world, there is still a significant appetite for
premium retail sites globally, with the top retailers using stores as part of
their customer experience strategy with significant investment in store design.
In addition, the continued growth of online, omni-channel retailing is becoming
standard. While technology is still a major disruptor in retailing, it is also
enabling physical retail to fight back as it allows retailers to better
understand their customers and to enhance the in-store experience.”

 

Combining online and
offline retail, some retailers in the US are shaping the future of retail with
their merchandise driven entirely by app users in the local area. In China too,
‘New Retail’, the concept of integrating online and offline channels, big data,
logistics and a complex supply chain, has continued to drive rapid expansion.
The role of bricks-and-mortar stores have been transformed from solely serving
customers and selling products into an integrated platform. Traditional retail
now serves a multitude of functions, including brand promotion, an experience centre
for customers and as a distribution centre, particularly in the fresh produce
segment.

 

Justin Taylor, Head of EMEA Retail at Cushman &
Wakefield, said: “There is still a healthy future for the sector but we are
moving to a ‘beyond retail’ phase as demographics are changing and business
models need to adapt. Traditional retail will survive but it will likely form a
smaller part of the overall tenant mix. Even in these most expensive high
street locations, we are likely to see a mix of uses such as restaurants,
childcare facilities, fitness and services.

 

“As a result,
traditional retail is therefore being resized, reinvented and reimagined. This
is most evident in the US and the UK, both of which have felt the force of
retailer restructuring and shrinking store networks, as well as a downward
readjustment of rents in some areas. Equally, however, the disruption is also
creating opportunities for exciting new operators and formats to emerge.”

 

Click here for the full report.

 

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a
leading global real estate services firm that delivers exceptional value by
putting ideas into action for real estate occupiers and owners. Cushman &
Wakefield is among the largest real estate services firms with 48,000 employees
in approximately 400 offices and 70 countries. Across Greater China, there are
20 offices servicing the local market. The company won four of the top awards
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