Aussie mall named one of world’s most expensive shopping strips
A new report has unveiled the most expensive retail streets in the world where it costs a small fortune to lease a shop – and an Australian mall is in the top 10.
New York’s famed Fifth Avenue, which counts Cartier, Bergdorf Goodman, and Tiffany & Co among its iconic retailers, takes out top spot in real estate firm Cushman & Wakefield’s ranking, thanks to its average rent of about $32,000 per square metre per year.
Despite the impact of Covid on the retail sector and economic turmoil in the United States, that cost has increased by 14% on pre-pandemic figures – and is up 7% year-on-year.
Hong Kong’s beloved Tsim Sha Tsui ranks as second most expensive shopping street globally, with an average cost of about $23,000 per square metre per year.
Coming in at third is Via Montenapoleone in the Italian shopping mecca of Milan, where a retailer pays an average of about $21,600 per square metre per year.
And rounding out the top five are New Bond Street in London, with an average cost of about $21,000 per square metre per year, and Avenues des Champs- Élysées in Paris, on about $16,900 per square metre per year.
The sole Australian entry in the top 10 is the popular Pitt Street Mall in Sydney, where retailers fork out about $11,700 per square metre per year.
Major international brands like Sephora, Zara, Tom Ford and Kate Spade can be found there alongside Aussie giants like RM Williams and Myer.
A glittering multi-level Westfield is the jewel in Pitt Street’s crown.
Despite its platinum status, the impact of the pandemic and the working from home trend is evident, with a 24% drop in average rents since the onset of Covid, and a 7% year-on-year reduction.
“The industry has been through one of the biggest stress tests imaginable over the past few years, but best-in-class retail real estate has remained robust,” Robert Travers, head of retail at Cushman & Wakefield, said.
“While we now face new economic challenges, the conversation has shifted from pessimism to retail’s omni-channel evolution.”
Many brands are playing a strategic long-term, securing prime real estate now in order to adapt to evolving customer needs, Mr Travers said.
“With further investment in high-quality in-store experiences and advances in omni-channel approaches, we are confident in the resilience of the sector, particularly at the luxury end, and in key global destination cities,” he said.
The report, titled Main Streets Across the World, tracks top retail streets in 92 cities to examine the most expensive by prime rental value.
While usually an annual report, which originated in 1988, this is the first ranking conducted since 2019 due to the outbreak of Covid.
That makes this latest incarnation an insightful look at pre- and post-pandemic performance.
Rents across global prime retail destinations fell by 13% on average at the peak of Covid but have subsequently rebounded to just 6% below pre-pandemic levels, the report found.
Global rental growth over the past year averaged 2% but has varied tremendously depending on location.