Hong Kong is by far the world’s most expensive city for global retailers, says global property advisor CBRE.
In its Q4 2013 Global Retail Rents report, CBRE said Hong Kong (US$4334 per sqft per annum) is the world’s most expensive location for prime retail rents by a substantial margin, followed by New York (US$3300 per sqft per annum), Paris (US$1452 per sqft per annum) and London (US$1356 per sqft per annum). Hong Kong has held this position for the past two years.
“Russell Street in Causeway Bay, Hong Kong remains the most expensive place in the world for retail rents off the back of its very limited supply, low vacancy and availability, and the ongoing demand for retail space due to the influx of shoppers from mainland China,” said Sebastian Skiff, executive director, CBRE Retail.
The ranking of prime retail locations/markets across the globe showed that competition in the world’s leading cities is getting even stronger. This demand is being fuelled by high-end retailers willing to pay record rents for the most coveted shops, while development levels are at historic lows resulting in a shortage of prime retail space. For Asia, Hong Kong, Tokyo and Beijing feature in the global top 10.
“Asia’s retail centers continued to grow and rents continued to increase, with gateway cities like Hong Kong, Tokyo and Singapore attracting retailers new to the region, and retailers established in these centers beginning to spread into emerging markets. This is helping to increase competition for space particularly in prime areas,” said Skiff.
Retailer demand in Hong Kong is focused on prime locations rather than secondary streets. The most sought-after prime streets are Russell St in Causeway Bay, Canton Rd in Tsim Sha Tsui and Queen’s Rd Central in Central. These locations – which all recorded very tight vacancy – continue to attract both global and local retailers, says the report.
Meanwhile, Tokyo remains one of the key gateway cities for retailers that are new to Asia Pacific. With luxury brands seeking to expand and domestic retailers willing to try new locations, leasing activity has spread to peripheral areas such as the Jinnan area in Shibuya.
CBRE also said global retailers continue to seek prime retail space in Beijing with designer brands 3.1 Phillip Lim and Cheap Monday opening their first China standalone stores. Fast fashion brands meanwhile are seeking opportunities in core submarkets, while F&B operators are increasingly popular with landlords of shopping malls, especially those in secondary locations due to their ability to attract footfall.
