Sydney's Pitt Street Mall ranked among the world's most expensive retail rental locations
Retail rents on Sydney’s Pitt Street Mall ranked as the fifth highest in the world in 2014, up from eighth most expensive the year before, a report from Cushman and Wakefield has found.
The report, Main Streets Across the World 2014/15, showed retail rents on the premier shopping strip grew by 25% over the year.
Pitt Street's increase was the second largest in the Asia-Pacific region after rents for retail space in Beijing's CBD, which rose by 26.4%.
In San Fransisco's Union Square, retail rents soared 30%, while in Istanbul's Istiklal Street, shop rents increased by 27.3%.
The report attributed the rapid growth of rents on Pitt Street Mall to international retailers signing new leases and taking up larger space through the amalgamation of smaller stores, which reduced the supply of space.
It noted there was a global trend for major retail brands to experiment with design, layout, content and services in their flagship stores. This was expected to remain a key factor influencing growth in major retail centres in the coming year.
Market activity was expected to improve in the next 12 months, despite uncertain economic outlooks for parts of the world.
“Premier shopping locations will remain in high demand as retailers are keen to establish a presence and raise their brand profile, but supply as ever will remain tight,” the report noted.
The world’s most costly retail space was along New York's Upper 5th Avenue, where rents were US$3,500 per square foot per year.
Hong Kong’s Causeway Bay shopping district, the Champs Elysees in Paris and London's New Bond Street ranked second, third and fourth, respectively.
Rents on Pitt Street Mall cost US$1,016 per square foot, the report found, making retail space along the mall more costly than prime shopping areas in Milan's Via Montenapoleone and Tokyo's Ginza district.
Retail rent rises in Australia were confined mainly to Pitt Street Mall and high performing regional shopping centres, where rents rose by 7.8% to A$2,200 per square metre per year, the report found
Landlords of premises in other prime retail strips in Australia have not shared the fortunes of Pitt Street Mall. No rental growth was reported for shops on Rundle Mall in Adelaide, Queen Street Mall in Brisbane, Bourke Street in Melbourne or in Perth's CBD.
Retail rents along Sydney’s Oxford Street continued to lag. Cushman and Wakefield’s report showed the cost to rent on the once-fashionable retail strip was A$1,050 per square metre per year, compared with A$12,500 per square metre per year on Pitt Street Mall.
The top 10 most expensive retail locations in each country:
Rent price is per square foot per year. Change in rental rates is compared to 2013 rates
- USA, New York, Upper Fifth Avenue
Rent price: US$3,500
Change in rental rates: +13.3% - Hong Kong, Causeway Bay
Rent Price: US$2,735
Change in rental rates: -6.8% - France, Paris, Avenue des Champs Elysees
Rent price: US$1,556
Change in rental rates: 0.0 - UK, London, New Bond Street
Rent Price: US$1,216
Change in rental rates: +4.2% - Australia, Sydney, Pitt Street Mall
Rent price: US$1,016
Change in rental rates: +25% - Italy, Milan, Via Montenapoleone
Rent price: US$998
Change in rental rates: +13.3% - Japan, Tokyo, Ginza
Rent price: US$953
Change in rental rates: +6.9% - South Korea, Seoul, Myeongdong
Rent price: US$932
Change in rental rates: +17.6% - Switzerland, Zurich, Bahnhofstrasse
Rent price: US$875
Change in rental rates: +1.1% - Russia, Moscow, Stoleshnikov
Rental price: US$557
Change in rental rates: +20%
Source: Cushman and Wakefield.
Picture courtesy of Mw12310/ CC BY-SA 3.0.