CBRE: Hong Kong remains most expensive retail market
Los Angeles — Hong Kong is by far the world’s most expensive city for global retailers. Even so, prime rents in major global markets such as New York, Paris and London continue to break records, according to new research from global property advisor CBRE Group.
CBRE’s quarterly ranking of 97 prime retail markets around the world shows that competition in leading cities is growing ever stronger. High-end retailers willing to pay record rents for the most coveted shop space are fueling the rising rents, while historically low development levels are limiting prime retail space.
Hong Kong (US$4,334 per sq. ft. per annum) is the world’s most expensive location for prime retail rents by a substantial margin. The most sought after locations in Hong Kong include Russell Street in Causeway Bay, Canton Road in Tsim Sha Tsui and Queen’s Road Central in Central.
New York City’s Fifth Avenue continued its ascent into record territory during fourth quarter 2013. Average asking rents there rose 4.8% quarter-over-quarter to an all-time high of US$3,300. That means a 5,000-sq.-ft. space would cost US$16.5 million per year in rent.
In Paris, significant interest from international retailers for limited space has produced steady rent growth over the past two years, to US$1,452. The city’s average prime asking rent has risen 80% since first quarter 2012. CBRE predicts that sustained demand from international retailers will continue to support high street rents in 2014.
Ditto London. Limited space and high demand has pushed rents for prime locations to record levels — US$1,356. However, the U.K. market has polarized, with poorer secondary shopping centers and high streets suffering increasing vacancies and falling rents.
In Australia, two cities made the CBRE top ten most expensive, according to CBRE. Sydney, number 6, has seen rents rise to US$871 per sq. ft. In Melbourne, ranked number 9, rents have reached US$732 per sq. ft.
Tokyo remains one of the key gateway cities for retailers that are new to the Asia Pacific region. Rents there top out at US$850. With luxury brands seeking to expand and domestic retailers willing to try new locations, leasing activity has spread to peripheral areas such as the Jinnan are in Shibuya.
Rental growth in Moscow’s prime areas remained stable during 2013, with rents of US$739. Demand for space remains steady, but the structure of the retail market is changing. The number of fashion retailers in high streets is decreasing, as Muscovites now prefer purchasing clothes and footwear in shopping malls. In fact, a number of new malls will soon open.
Global retailers continue to seek prime space in Beijing, with designer brands 3.1 Phillip Lim and Cheap Monday opening their first standalone stores in China. Prime Beijing space is going for US$681 per sq. ft. today. Fast fashion brands are seeking opportunities in core submarkets, while food and beverage operators are increasingly popular with mall landlords, especially those in secondary locations due to their ability to attract customers.
Rick Caruso launches Linkedin Influencer blog
New York — Rick Caruso, founder and CEO of Caruso Affiliated has launched a new blog on LinkedIn Influencers, an exclusive blog site for influential thought leaders. To read his inaugural post, visit post, ”The Indoor Mall is Dead, But Physical Retail Thrives.”
In it, Caruso outlines his views on the current status of traditional retail and his vision for the future of brick-and-mortar. The column will continue to explore the evolution of real estate, retail and business.
DDR releases 2013 corporate social responsibility report
Beachwood, Ohio — DDR Corp has published its 2013 Corporate Social Responsibility report, which can be viewed at csr.ddr.com. The report features various initiatives taken by DDR employees throughout 2013
“Our employees across the United States, Puerto Rico and Brazil are finding innovative ways to deliver results that elevate our business performance, and do so in a way that promotes environmental, philanthropic and civic appreciation,” said Daniel B. Hurwitz, chief executive officer of DDR.
To that end, DDR and its employees elevated awareness in 2013 through charitable contributions and volunteering for various civic and non-profit organizations. Additionally, the company advanced its focus on building and maintaining a progressive corporate culture by further investing in training and professional development for all employees. Lastly, from an environmental perspective, the company improved upon numerous sustainability initiatives aimed at energy reduction, water conservation and recycling.