Hong Kong’s Russell Street & Queen’s Road Central Rank 2nd & 3rd Most Expensive Retail Corridors

June 13, 2011 - PRLog -- Consumers’ return to luxury spending is fuelling a strong, upward trend in retail rental rates in most of the world’s luxury shopping districts. According to Colliers International’s 2011 Global Retail Highlights, luxury retail has bounced back from two years of lacklustre growth, and top global brands are capitalizing on this new vitality to enter or expand on premier streets in the global marketplace.

The premier retail rents of New York’s Fifth Avenue took the top spot globally at US$2,150.00 per sq ft per year as of March 2011, kicking Avenue des Paris’ Champs Elysees, the most expensive premier retail corridor in 2010, to 8th spot in the global ranking this year.

Global Top Five Premier Retail Corridor Rents (as of March 2011)
1. New York – Fifth Avenue: US$2,150.00 per sq ft per year (+72.0% YoY)
2. Hong Kong – Russell Street, Causeway Bay: US$1,509.88 (+25.6% YoY)
3. Hong Kong – Queen’s Road Central: US$1,355.81 (+29.4% YoY)
4. London – Old Bond Street: US$961.85 (0.0% YoY)
5. Zurich - Bahnhofstrasse: US$955.38 (+14.2% YoY)

“Luxury retail is back to its pre-recession levels, outpacing the growth of retail overall,” said Ross J. Moore, Chief Economist for Colliers International’s USA business and author of the global report. “Much of this is aspirational spending on the part of consumers who want a slice of a luxury lifestyle, even if they can’t afford the entire package.”

Colliers International’s researchers found that not only has consumer confidence returned to boost the luxury market, but investor confidence has also pushed luxury brand stock prices significantly higher, including Burberry, Bulgari, Richemont-Cartier and Tiffany. For owners of the world’s premier shopping districts, that confidence enables them to charge substantially higher rent—New York’s Fifth Avenue rents for US$2,150 per square foot, per year, up 72% year-on-year (YoY) over 2010 rates.

On a global basis, premier shopping destinations in Asia are outpacing other world regions. Except Tokyo’s Ginza-Chuo Avenue and Singapore’s Orchard Road seeing retail rents keeping unchanged, the prime retail corridors in Asia recorded increasing rentals with growth ranging from 6% to 29% YoY as of March 2011.

“The vibrant retail market growth in Asia is supported by the continued expansion of economy in the region. With the high spending power of the Mainland Chinese visitors, many international retailers eye on the growing retail markets in the region. In addition to the retailers’ occupation demand, the notable rental increases are also stimulated by the inflationary pressure in Asia,” said Simon Lo, Executive Director of Research & Advisory, Asia

Hong Kong stands out in Asia, with a rent spike on Russell Street, Causeway Bay and Queen’s Road Central of 25.6% YoY and 29.4% YoY, respectively.

“Retailers are confident in the strong retail sales of Hong Kong. In April 2011, the total value of retail sales rose 27.7% YoY to over HK$32 billion. One of the major supports in the retail market is the spending of the growing number of visitors, which increased 20.1% YoY to over 3.3 million arrivals in April 2011,” said Helen Mak, Director of Retail Services at Colliers International Hong Kong.

“The strong spending power of Mainland Chinese visitors in Hong Kong attracts international brands in particular. By opening flagship stores in Hong Kong, international retailers do not only capture the Mainland Chinese visitors’ spending in the stores, but also strengthen their brand positioning amongst the Chinese visitors’ perception. Seeing the strong supports on retail sales, more international brands ranging from luxury to fashion labels, which are new to the local market, are anticipated to explore opportunities to get a share of the pie. Meanwhile, international retailers currently operating in Hong Kong are also keen to look for expansion. Thus, we expect the buoyant demand of quality retail properties in Hong Kong’s prime streets will sustain,” commented Mak.

Other notable high streets in the world include Zurich’s Bahnhofstrasse, where rents were up 14.2% YoY, and in Moscow, where landlords charged 21.3%YoY more for Tverskaya Street. London’s Old Bond Street and Paris’s Avenue des Champs-Élysées remained solid—still expensive, but with rental rates unchanged compared the last year.

Colliers International’s researchers noted substantial growth in luxury spending in emerging economies, while two high streets in struggling economies, Athens and Dublin, reported a substantial rental rate decline.

Please click the link below to view the full report.
http://www.colliers.com/Country/UnitedStates/content/Reta...