Press

NOWY ŚWIAT THE MOST EXPENSIVE HIGH STREET IN POLAND, FIFTH AVENUE IN THE WORLD

• New York’s Fifth Avenue remains the world’s most expensive retail address
• London’s New Bond Street overtakes Paris’s Avenue des Champs-Elysées as Europe’s most expensive
• Hong Kong’s Causeway Bay is still the most expensive in Asia Pacific
• Latin America and Asia-Pacific lead global growth in retail rents

Most of the world’s top retail locations have remained resilient during the last twelve months, with Latin America and Asia-Pacific showing the most positive rental growth, according to Cushman & Wakefield. Around two-thirds (66%) of the 59 countries surveyed by the real estate adviser for its annual Main Streets Across the World report reported prime rents either rising or remaining static over the year to June. The findings paint a brighter outlook to those of 2009, which revealed the biggest global fall in rents in the report’s 25 year history.

Main Streets Across the World provides a global barometer of the retail sector, tracking rents in the world’s top 269 shopping locations across 59 countries. The league table is drawn up by taking the most expensive location in each of the countries monitored.

New York’s Fifth Avenue, where rents increased by 8.8%, kept its number one spot as the world’s most expensive retail address, for the ninth year running. Causeway Bay in Hong Kong remained at second place. London’s New Bond Street leapt two rankings, to overtake Avenue des Champs-Elysées in Paris – the biggest faller in the top ten with a 9.5% rental decrease - as the most expensive location in Europe.

The emerging markets performed strongly due to strong tourism and demand from international retailers. Brazil’s Haddock Lobo street in Sao Paulo was the biggest riser globally, with rents increasing by 92%. Ginza in Tokyo, Japan, climbed from fifth in the league table last year to third this year and South Korea’s Myeongdong in Seoul jumped three places from eleventh to eighth.

Of all the locations in Europe that were monitored, London’s New Bond Street was the biggest riser, with a 19.4% rental increase. In Asia-Pacific, India’s Linking Road in Mumbai showed the strongest growth, with rents rising by 33%. Around the world, the biggest fall in rents was in Bulgaria with a 50% drop in Alexander Batenbeg, Plovdiv, and in Alexandrovska, Burgas.

Europe as a whole registered a decline in rents of 4.5%. Ireland’s Grafton Street in Dublin tumbled from eighth to thirteenth, with rents dropping by 25.8%, and Ermou in Athens, Greece, plummeted seven rankings with a 15.4% rental decline.

This year’s findings reveal a clear polarisation between prime and secondary locations. Secondary locations have been much more adversely affected by the fall-off in retailer demand and consequent decline in rents, as retailers move quickly to close unprofitable stores and rein in expansion.

The world’s ten most expensive shopping streets 2009
Rank 2010	Rank 2009	Country	City	Street	USD/sq ft/year	€/sq m/year	% change
1	1	USA	New York	5th Avenue	1 850	16 257	+8.80
2	2	China	Hong Kong	Causeway Bay	1 664	14 620	+9.60
3	5	Japan	Tokyo	Ginza	877	7 711	+4.50
4	6	UK	London	New Bond Street	836	7 345	+19.40
5	3	France	Paris	Avenue des Champs Elysees	793	6 965	-9.50
6	4	Italy	Milan	Via Montenapoleone	770	6 770	0.00
7	7	Switzerland	Zurich	Bahnhofstrasse	685	6 020	0.00
8	11	South Korea	Seoul	Myeongdong	551	4 844	+17,80
9	10	Australia	Sydney	Pitt Street Mall	468	4 116	0.00
10	9	Germany	Munich	Kaufingerstrasse	421	3 704	+3.30

John Strachan, Global Head of Retail, Cushman & Wakefield, said: “The aftershocks of the global economic recession are still being felt in the retail property market and the path leading from recession to recovery has been far from smooth. In the more mature markets, occupiers are expected to remain cautious and selective about the space they take. However, on the great shopping streets of the world, in cities such as London and New York, demand has continued to exceed supply and the appetite of international brands has resulted in rental uplift. The emerging economies look set to experience significant growth in the retail sector, thereby boosting demand for good quality, well-located property. At present, Asia-Pacific has the best growth prospects.”

Retailers on New York’s Fifth Avenue can expect to pay $1,850 per sq ft per annum.

Gene Spiegelman, Executive Vice President, Cushman & Wakefield New York, said: “Despite ongoing domestic and international economic pressures, Fifth Avenue continues to represent a highly desirable global branding opportunity for major retailers. With New York's attraction as such a popular destination for domestic and international tourism, Fifth Avenue is able to maintain the top position for companies that want to project or maintain their brands on the global stage."

New Bond Street, where retailers can expect to pay $836 per sq ft per annum, jumped to the most expensive street in Europe.

Peter Mace, Head of Central London Retail, Cushman & Wakefield, said: “New Bond Street remains one of the most sought after locations in the world for luxury brands and, due to the significant imbalance between supply and demands, the thoroughfare continues to witness significant rental growth. The recent letting of 169 New Bond Street to Piaget represented a record rent for the street with the new tenant also contributing a significant premium to secure vacant possession. There were four under-bidders for the store. This trend is likely to continue for the foreseeable future on the basis that there are still a large number of retail requirements that remain unsatisfied."

Avenue des Champs-Elysées in Paris fell one ranking to the second most prestigious location in Europe.

Christian Dubois, Head of Retail Services France, Cushman & Wakefield, commented: “The strong resistance from the Municipality to grant approvals to new fashion retailers, the mismatch between the availability of large spaces and requirements for smaller stores from international retailers, combined with negative indexations of the rents, have all contributed to the lower ranking of Champs Elysées. However, the future openings of H&M, Abercrombie & Fitch and Tommy Hilfiger have attracted great interest from new brands across the world and we are seeing severe competition for few opportunities once again. Together with the new trading laws allowing retailers to trade seven days a week, we expect rental values to rise again in the short term."

Brazil and South Korea both performed strongly due to strong tourism and demand from international retailers.

Mariana Mokayad Hanania, Manager – Research Services, Cushman & Wakefield South America, said: “The sharp increase in Brazil's GDP in Q1 2010, confirmed that the country is in a cycle of economic growth based on the solid economic indicators of the first half of the year, both in terms of output as well as domestic demand. The overall retail sales increased about 13.5% in the first quarter and retail rents on the whole have been well supported by the increase in household consumption, jobs and wages. Most of the Brazilian luxury market (70%) is concentrated in Sao Paulo. There has been a growth in demand for stores on Oscar Freire, H. Lobo and Lorena streets, as well as in Shopping Iguatemi; where most of the luxury brands want to be located. Availability in these areas is extremely reduced and asking rents are continually increasing.”

Mark Burlton, Cross Border Retail Partner EMEA & Asia, Cushman & Wakefield, said: “The recent rise of Korea in the list is largely a result of its general economic recovery fuelled mainly by a very strong export market which saw a 7.2% rise in the second quarter of 2010. Consumer expenditure initially lagged behind these optimistic figures but recent increases in dining out, clothing and footwear consumption give further confidence. Retail rents have returned to pre-credit crunch numbers with prime areas such as Myeongdong and Gangnam Station showing an average 17% increase this year. Global brands such as H&M and Zara have opened in prime locations having out-bid local retailers and the rapid rise in low and mid-priced cosmetics companies have also driven rents upwards. These trends are likely to continue in the near term as demand is still very much outstripping supply.”

Anthea To, Retail Analyst, Cushman & Wakefield, said: “As we move in to 2011, the global economic outlook looks likely to remain uncertain and concerns remain that the recovery will stall. A lack of clarity in future conditions is clearly holding some retailers back and preventing a stronger recovery taking hold. A consensus is emerging that growth next year will be more modest than originally forecast. Nonetheless, the more savvy operators have been active through the low point in the market, leasing space and securing good deals from landlords, which will enable them to take full advantage of a more sustained economic recovery once it kicks in.”

Nowy Świat in Warsaw, the most expensive retail street in Poland, has taken 40th position in the ranking of the world’s 59 most expensive retail streets (39th position in 2009) with annual rent of EUR 992 per 1 sq.m.

Other high streets in Poland with prime rents are as follows:

• Warszawa – ul. Chmielna – annual rent 932 EUR/sq.m
• Kraków – ul. Floriańska – annual rent 920 EUR/sq.m
• Warszawa – ul. Marszałkowska – annual rent 753 EUR/sq.m
• Katowice – ul. 3 Maja – annual rent 717 EUR/sq.m
• Poznań – ul. Półwiejska – annual rent 693 EUR/sq.m
• Warszawa – Al. Jerozolimskie – annual rent 597 EUR/sq.m
• Wrocław – ul. Świdnicka – annual rent 597 EUR/sq.m
• Gdynia – ul. Świętojańska – annual rent 418 EUR/sq.m
• Szczecin – Al. Niepodległości – annual rent 382 EUR/sq.m
• Łódź – ul. Piotrkowska – annual rent 358 EUR/sq.m

Tomasz Górski, negotiatior in the Polish office of Cushman & Wakefield, said: “The situation on the Polish high streets remains stable. The rent falls observed earlier had been caused by prevailing slow pace of high streets development compared to other European countries, as well as by scaling down the expansion plans of financial institutions (leading, in some case, to closing branches in less attractive locations). The market is now experiencing a clear polarisation between primary and secondary locations. The former see rent stabilisation, the latter rent declines. There is also more activity on the occupier market, e.g. in Warsaw at Nowy Świat street – the opening of Ferrari’s showroom, Grycan’s new ice-cream parlour, and H&M (opening soon); at Marszałkowska street – TK MAXX and Marks & Spencer (opening soon).”