Luxury retail continues to grow strongly in a number of top worldwide markets and key Asian cities, according to a new analysis by Colliers International. the pearl qatar
A increasing consumer confidence level, owing in part to the fading memory of the recent global economic crisis, is one significant element propelling luxury sales. (In reality, according to Nielsen's Q214 Global Consumer Confidence Survey, consumer confidence has increased in 52 percent of the markets examined.) Another element supporting the expansion of luxury retail is the significant increase in income of the wealthiest people, which leads to a higher proclivity to spend.
"Our analysis of the global retail real estate environment reveals what we've been seeing this year—a cautiously optimistic retail market that is steadily growing in many sectors, despite some hiccups of caution due to threats to global economic growth and the shadow of e-commerce," said Anjee Solanki, Colliers International's National Director of Retail Services. "Luxury, in particular, is a big catalyst for the expansion we're seeing, particularly in regions like Europe and Asia where GDP growth and consumer spending are poor."
The following are some other notable retail findings:
The sweet spot for luxury retailers is right now. Luxury stores are benefiting from rising incomes among the wealthy, and they are thriving in many of the world's most prestigious cities, including Paris, London, New York, and Asia's major cities. As shown below, growth in this sector is a crucial driver in driving expansion across the board.
In developing markets, new supply is plentiful. The global expansion of the workforce and middle class is driving a demand for additional supply, which is mostly focused in developing countries in Europe, the Middle East, and Asia with strong economies, stable governments, a growing middle class, and business-friendly regulatory regimes.
Threats to global economic development and the shadow of e-commerce damp optimism. E-commerce is affecting both traditional and luxury retailers around the world, putting pressure on merchants to come up with more innovative space-use solutions. One popular method is to convert storefronts into product showcases in order to attract more foot traffic and increase online sales.
High-street marketplaces are performing well, and new markets are developing rapidly. The economic recovery in the United States, as well as good employment growth in many parts of the world, back the generally hopeful outlook.
New York's Fifth Avenue is at the top of the list of the top 10 worldwide retail rents for the year (per square foot in USD), followed by New York's Madison Avenue and Hong Kong's three positions. London, Milan, Moscow, Paris, and Zurich each get one slot on the list (in alphabetical order, not by importance).