Hong Kong's retail sector is by far the most expensive in the world for global retailers, with top rents in major cities such as New York, Paris, and London reaching record highs. During the fourth quarter, premium retail rentals in Hong Kong hit $4,333 per square foot per year, leading CBRE's quarterly list of 97 premium retail markets throughout the world. zig zag tower
New York comes in second with $3,300 per square foot each year, followed by Paris ($1,452), London ($1,356), and Zurich ($961).
According to CBRE research, premier retail is strong and leading locations are becoming stronger, owing to increased demand from high-end merchants prepared to pay record rents in an environment where development costs are at historic lows.
In the research, Raymond G. Torto, worldwide chairman of CBRE Research, noted, "There has been a lot of discussion about the strength of luxury merchants versus those who serve the mid-market." "Prime retail rentals in New York, Paris, and London have risen 11, 28, and 18 percent year over year, respectively, from already sky-high levels."
Retail demand in Hong Kong is concentrated on excellent areas rather than peripheral streets. Russell Street in Causeway Bay, Canton Road in Tsim Sha Tsui, and Queen's Road Central in Central are the most popular premium streets.
The Northeast area led the country in prime asking rent rise in the fourth quarter, with Newbury Street in Boston (6.7 percent q-o-q), Walnut Street in Philadelphia (5.8% q-o-q), and Fifth Avenue in New York (4.8 percent q-o-q) having the highest increases.
According to CBRE, prime rentals in Paris have surged by 80% since the first quarter of 2012, owing to high demand and limited supply.
Australia was the only country with two cities in the top ten highest retail rentals according to CBRE. With the first Australian stores of UNIQLO, H&M, and Forever 21, Melbourne, which ranked tenth in the globe, was the most favored landing site for quick retailers in 2013.
Consumer confidence in Japan has risen to its highest level since 2005 as the economy recovers. Tokyo came in eighth on the list and continues to be a significant entry point for retailers trying to expand into Asia Pacific.
With designer brands 3.1 Phillip Lim and Cheap Monday opening their first China freestanding stores, Beijing rounded out the top ten for CBRE's list.
"In the meantime, fast fashion retailers are looking for possibilities in core submarkets, while food and beverage operators are becoming increasingly popular with shopping mall landlords, particularly those in secondary locations, due to their capacity to draw visitors," according to CBRE.