Sydney's Pitt Street Mall ranked among the world's most expensive retail rental locations

Zoe FieldingNovember 25, 20140 min read

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

  1. USA, New York, Upper Fifth Avenue

    Rent price: US$3,500
    Change in rental rates: +13.3%
  2. Hong Kong, Causeway Bay

    Rent Price: US$2,735
    Change in rental rates: -6.8% 
  3. France, Paris, Avenue des Champs Elysees

    Rent price: US$1,556
    Change in rental rates: 0.0
  4. UK, London, New Bond Street

    Rent Price: US$1,216
    Change in rental rates: +4.2%
  5. Australia, Sydney, Pitt Street Mall

    Rent price: US$1,016
    Change in rental rates: +25%
  6. Italy, Milan,  Via Montenapoleone

    Rent price: US$998
    Change in rental rates: +13.3%
  7. Japan, Tokyo, Ginza

    Rent price: US$953
    Change in rental rates: +6.9%
  8. South Korea, Seoul, Myeongdong

    Rent price: US$932
    Change in rental rates: +17.6%
  9. Switzerland, Zurich, Bahnhofstrasse

    Rent price: US$875
    Change in rental rates: +1.1%
  10. Russia, Moscow, Stoleshnikov

    Rental price: US$557 
    Change in rental rates: +20%

Source: Cushman and Wakefield. 

Picture courtesy of  Mw12310CC BY-SA 3.0.

Zoe Fielding

I am a freelance journalist and editor with more than 15 years experience specialising in personal finance, property, financial services and financial technology. A skilled writer and researcher, I have extensive experience producing high quality content for corporate and media clients. I am used to working to tight deadlines and tailoring the pieces I produce to suit a variety of audiences and formats.
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