Hong Kong Is The World’s Most Expensive City For Retailers
Sep 10, 2013
For global retailers, Hong Kong is by far the most expensive city, but prime rents in New York, London, Tokyo and Zurich are rising according to a new research from CBRE Group, the global property consulting firm.
CBRE’s Q2 2013 survey looks into the top 10 prime global retail markets. Among them, the 4 markets – New York, London, Zurich and Tokyo – saw quarterly increases in prime retail rents, compared to only one market during the previous quarter. Construction at historically low levels together with fierce competition between retailers for the best locations is fueling the growth, leading to record-breaking rents in many global markets.
Hong Kong tops the rankings at US $4,328 per sq. ft. per annum, with New York holding the second position at $3,050 per sq. ft. per annum, and Paris at $1,220 per sq. ft. per annum.
Hong Kong’s high rents do not discourage global retailers from seeking to establish a presence there, in the hope of benefiting from the growing luxury retail scene. CBRE research shows that stores of 51 new retailers were opened in Hong Kong last year and the city 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. 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,” said Joe Lin, Executive Director of Retail, Hong Kong, CBRE.
Prime rents in Sydney ($945 per sq. ft.), Melbourne ($794 per sq. ft.), and Brisbane ($599 per sq. ft.), held steady this quarter despite flat retail turnover figures. Low vacancy rates and the limited new supply coming to the market have proven to be beneficial to Australia, according to Josh Loudoun, Senior Director, Retail Services Australia, CBRE.
“The influx of international retailers has also continued with both Brooks Brothers from the US and Marks & Spencer from the UK recently announcing they would enter Australia,” said Loudoun.