Hong Kong retains first place in global ranking of most expensive shopping streets

• Half of global top 10 locations
  are European with four from Asia and one from the US
• Beijing’s Wangfujing is ranked
  11th in the global list and 6th in the Asia Pacific list
• Seven locations across Greater
  China made the top 20 in the Asia Pacific list
• Challenging retail market is
  putting pressure on rents in some areas
• Online retail sales are growing
  rapidly around the world. 

HONG KONG,
CHINA – Media OutReach – 13
November 2019 – Hong Kong’s Causeway Bay has retained its crown as the world’s most
expensive shopping street, followed by New York’s Upper 5th Avenue and London’s
New Bond Street, according to new data from Cushman & Wakefield. Beijing’s
Wangfujing is the other city across Greater China to break the top 20, with a
global rank of 11.

The annual ‘Main
Streets Across the World’ report tracks rents for 448 locations across 68
markets – the largest number ever included since it started in 1988. The report
ranks locations by their prime rental value using Cushman & Wakefield’s
proprietary data.

Last year Causeway Bay ended five years of domination by New York’s
Upper 5th Avenue, and in the 2019 rankings,it retains its position with rents
to locate a store amounting to $2,745 per sq ft/yr. Upper 5th Avenue is in
second place at $2,250 psf/yr, with London’s New Bond Street third in the
global list, with annual rents at the London thoroughfare having risen 2.3% in
the past 12 months to $1,714 per psf/yr.

Report author Darren Yates, Head of EMEA
Retail Research at Cushman & Wakefield, said: “In terms of rental performance,
this year’s results are encouraging and demonstrate the resilience of the
premier retail locations. Rents on the world’s top retail streets have been
fairly stable and there is greater clarity on where retail is heading. However,
there is downward pressure on rents in many weaker locations, particularly in
the more mature markets of Europe and North America.  In Asia Pacific, retail has generally
performed well across a very diverse group of markets.”

In Europe, New Bond Street leads the way ahead of Paris and Milan, with
Zurich’s Bahnhofstrasse at $866 psf/yr and Vienna’s Kohlmarkt at $513 psf/yr
completing the top five. Overall, rents in around 70% of locations in Europe
were stable or up on last year. Polarization is evident, however, between the
more established markets of North Western Europe and Southern, Central and
Eastern Europe, where online sales have yet to really accelerate.

In the Americas rental trends have shown a wide degree of variation.
Rents in Canada and the US remain under pressure in many areas, although there
can be significant variations between individual streets. There is some good
news in that rents in New York streets appear to be stabilizing, following
falls in recent years. Latin American retail markets continue to mature,
although rents can be volatile.

The Asia Pacific region is in a relatively strong position, with rents
in over 80% of locations covered either rising or stable. India recorded a
particularly strong performance, with solid rental growth across several
cities, while retail rents in Hong Kong have been resilient in the face of the
recent protests — although the outlook is more uncertain.

“Hong Kong’s Causeway Bay, (Russell Street) remains the world’s
most expensive retail street this year, based on data as of June 2019 at the
time the global survey was completed. Since then, however, the Hong Kong retail
market has come under growing pressure from local social unrest that has led to
a sharp drop in tourist arrivals and retail sales, as well as interruptions to
retailer operations, especially during weekends. As a result, retail rents have
fallen across all submarkets in recent months and the outlook for the remainder
of the year is muted,” explained Kevin
Lam, Executive Director, Head of Retail Services, Hong Kong at Cushman &
Wakefield. “However, some retailers see the current market
correction as a rare opportunity to return to the high street, and we therefore
expect some adjustment in retail trade mix. In particular, trades that focus on
mass-market demand and local consumption, such as the education, lifestyle and
sports/athleisure sectors, will fare better in the current environment. We are
seeing a number of such retailers cautiously look for opportunities to expand
or to seek a better rental package.”

Across Greater China, seven locations ranked in the top 20 in the Asia
Pacific list, including Hong Kong (1st), Beijing (6th), Shanghai (8th),
Shenzhen (11th), Guangzhou (13th), Taipei (15th) and Nanjing (20th). All of
their rankings remained unchanged from last year, besides Nanjing, which moved
three places up to round out the list.

Most major cities in mainland China continue to see a significant amount
of new retail development, with activity being driven by both domestic and
international retailers, the latter continuing to pursue a strategy of opening
in multiple locations. A variety of sectors are active, including fashion,
children’s education, cosmetics, entertainment, luxury, lifestyle, fitness and
F&B.

Following initial concerns about the impact of online on traditional
retail, the focus has now shifted to developing the ‘new retail’ model, which
blends the best of both in-store and online experiences. Shopping malls and
retailers are now deploying smart technologies across the whole retail spectrum
from merchandising to marketing and customer engagement, intending to improve
operational efficiencies, reduce costs and enhance the customer shopping
experience.

Darren Yates further expanded on the relationship
between online and in-store retail experiences: “Online sales continue to
increase around the world, but while much of the narrative is focused on the
challenges the internet poses for traditional bricks and mortar, the
relationship between the two is more complex. While quantifying the value of
the store has become more difficult, it remains an important touchpoint for the
consumer and generates both in-store and online sales by acting as a showroom
and creating a wider brand presence — the so-called ‘halo effect’. The most
successful retailers will be those who best integrate their physical and online
operations to create a seamless, positive brand experience for shoppers.”

Please click here to download the report.

Notes to
Editors:. Data is Q2 2019

Data for retail rents relates to our professionals’ opinion of the rent
obtainable on a standard unit in a prime pitch of 448 locations across 68
markets around the world. For the purposes of this survey, the standard main
street unit is defined — where possible — as a unit with 150-200 sq.m of sales
area.  Typically, a unit has a frontage
of 6-8 metres. However, an element of flexibility is needed with the
definition, given that unit configuration varies from market to market.  Assumptions regarding ancillary space follow
local practice.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global
real estate services firm that delivers exceptional value for real estate
occupiers and owners. Cushman & Wakefield is among the largest real estate
services firms with 51,000 employees in approximately 400 offices and 70
countries. Across Greater China, there are 22 offices servicing the local
market. The company won four of the top awards in the Euromoney Survey 2017
& 2018 in the categories of Overall, Agency Letting/Sales, Valuation and
Research in China. In 2018, the firm had revenue of $8.2 billion across core
services of property, facilities and project management, leasing, capital
markets, advisory and other services. To learn more, visit www.cushmanwakefield.com.hk or follow us on
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