Prime retail rents stabilise across the world
Published: 25 May, 2010
Prime retail rents in the world’s leading shopping destinations stabilised in the majority of markets, and grew in a number of major cities, in the first quarter of 2010, according to CB Richard Ellis.
As the global economic recovery begins to gather momentum, consumer and retailer confidence have started to improve. While this has still not translated into retail sales growth in most markets, demand for prime retail space remains healthy and vacancy in the best locations is low. As a result, there are some markets globally where prime rents are rising, and many more where the rate of decline has slowed or rents are now stable.
New York City remains the world’s most expensive retail destination, with prime rents at US$1,725 per sq ft pa. Sydney remains in second place globally at US$1,155 per sq ft, with Hong Kong third at US$974.
London remains in fourth place with top rents of US$861 per sq ft after recording a 20 per cent annual increase in rents since the first quarter of 2009, with ongoing strong demand and low vacancy rates in the prime locations. Paris rounds out the top five locations with rents of US$791.
Ray Torto, CBRE’s global chief economist, said: “Retailers still face uncertain trading conditions and continue to put pressure on landlords to offer incentive packages. However, market pressures have not stopped retailers from expanding and demand for prime retail space remains strong in many markets across the world. This, combined with low vacancy rates, has created supply-demand imbalances in some markets. However, the rental disparity between prime and secondary locations is generally increasing. Whilst prime space is doing well, secondary units are typically seeing higher vacancy, lower retailer demand and falling rents.”
