Sydney's Pitt Street third most expensive in the world for retail
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Retailers looking to rent property in Australia’s key CBD locations continue to pay among the highest premiums in the world, this despite the cautious retailing environment.
The latest CB Richard Ellis Global Retail MarketView ranks Sydney’s super prime retail locations (equivalent to rents paid for the best street-front space on Pitt Street Mall) as the third most expensive high street destination at $US1,301 per square foot per annum, behind New York’s Fifth Avenue (US$1,900 per square foot) and Hong Kong’s Pedder Street (US$1,697 per square foot).
Renting retail space in Sydney’s Pitt Street Mall is more expensive than renting in the most expensive streets in Paris, London or Tokyo.
Brisbane’s Queen Street Mall ($US753 per square foot) and Melbourne’s Bourke Street (US$691 per square foot) rank eighth and 10th respectively.
Joshua Loudoun, regional director of retail services at CBRE, expressed no surprise that Sydney maintained its high ranking in the super prime space.
He told Property Observer a key reason for this buoyancy is the very limited super prime space available, compared with what’s available in London or New York.
“Look at the length of Fifth Avenue or Regent Street compared to Pitt Street Mall,” he says.
“There is a lot of competition for rents,” he says. “Sydney has been consistently up there. The new Sydney Westfield and the opening of Zara in the Pitt Street Mall is attracting other retailers.”
Loudon expects to see continued rental growth in these markets.
“While retail spending has been subdued with consumers remaining cautious and opting to save more or shop more frugally, international retailers continue to be active in key Pacific markets,” he says.
“As a result, the cautious consumer story has not impacted on rents, as most key retail areas have either weathered the storm of subdued spending and cautious local retailer demand or witnessed rental growth due to tight supply constraints.”
However, Loudoun says recent and new supply throughout the main CBD markets is likely to put pressure on rental levels until the demand from international and national retailers absorbs the newly built stock and back-fill space.