Hong Kong and New York City began 2012 as the two most expensive retail rental markets in the world and they ended the year in the same positions, according to CBRE’s third quarter MarketView research report.
On Fifth Avenue rents have increased by 17 per cent
Despite global economic uncertainty there is still a market for luxury items and tourists are more than willing to spend big on high-end products. This is the segment of the market that pushes retail rents up into the stratosphere in gateway cities around the world.
Hong Kong and New York receive large numbers of international visitors annually, and they are coming prepared to spend money.
As a result, a limited availability of new premier space and continued demand are combining to drive up prices. The cost of retail space in Hong Kong reached $4,334 (£2667) per square foot in the third quarter, which placed this city in the Number One spot.
In New York, the average cost per square foot was $2,925 (£1800). Along Manhattan’s Fifth Avenue, rents have increased by 17 per cent.
In the third quarter of 2011, New York City held the top spot for most expensive place to set up a retail store. The average rent was $1,900 (£1169) per square foot. Hong Kong came in second at $1,695 (£1043) per square foot.
Tokyo was the third most expensive retail market on the planet with rents coming in at $1,084 (£667) per square foot.
Sydney held the fourth place spot at $1,017(£625). London was the fifth most expensive spot at $988 (£608) per square foot.
The rest of the top 10 list in the third quarter was made up of Melbourne, Zurich, Paris, Moscow and Brisbane. Retail rents in these cities ranged from $850 (£523) per square foot in Melbourne to $642 (£395) per square foot in Brisbane.
