Hong Kong still tops global rent rankings
Hong Kong has held its place atop the list of the world’s most expensive cities to lease high street retail space.
But there are some surprises further down the list.
CBRE has released the latest rankings which average out a city’s high street rentals. The Cushman & Wakefield rankings released in November rank individual streets and saw New York’s Fifth Avenue displace Causeway Bay.
In this week’s study, Hong Kong, for the third year, surpasses New York, Paris and London with no change in the top four rankings.
Hong Kong (US$4327 per sqft per annum) maintained a wide lead over the number-two market, New York (US$3570) – where prime rents along Fifth Avenue are at record levels. Rents in Hong Kong remained stable compared to Q2 2014.
At the lower end of the rankings, there was some movement. Despite Japan entering a recession, rents rose in Tokyo (US$1076) due to a chronic shortage of prime retail space. They fell in Zurich ($895) and in Sydney (US$730), resulting in the cities changing positions this quarter.
CBRE said the Occupy Central protest, which began late in Q3 and finally ended last week, has not yet materially impacted retail rents in Hong Kong as most prime retail shops are located beyond protest areas.
Joe Lin, executive director, retail services with CBRE Hong Kong said third quarter official retail sales results still recorded growth which shows consumption power remains strong and mass spenders have digested the social impact brought about by the protests.
“Retail rents in Hong Kong have slowed since the beginning of this year, but the drop is likely a reflection of the fact that consumers are considering more mid-range brands. Despite this, as an Asia consumer hub, Hong Kong continues to see expansion requirements from high-end retailers, particularly from local jewellery retailers, as well as an influx of new retail entrants. This will continue to support local retail rents in the territory, in the long term,” added Lin.
Tokyo continued to lead rental growth in Asia Pacific in the third quarter of 2014, with the continued lack of space in major high-street retail locations pushing up retail rents by 7.7 per cent quarter-over-quarter.
Strong rental growth was also recorded in a number of emerging markets in the region, particularly in India and Vietnam, “reflecting the recent resumption of structural economic reforms following the general lack of progress over the past few years”.
Highlights included a strong 5.9 per cent quarter-over-quarter rental growth in Ho Chi Minh City and four per cent in Mumbai.