New York’s Fifth Avenue Reclaimed the Top Spot
as World’s Most Expensive Retail Corridor

Increasing rental, from 6% to 29%, recorded in most Asian prime retail corridors

17 June 2011, Bangkok – Consumers’ return to luxury spending is fuelling a strong, upward trend in retail rental rates in most of the world’s luxury shopping districts. According to Colliers International’s 2011 Global Retail Highlights, luxury retail has bounced back from two years of lacklustre growth, and top global brands are capitalizing on this new vitality to enter or expand on premier streets in the global marketplace.

The premier retail rents of New York’s Fifth Avenue took the top spot globally at US$2,150.00 per sq ft per year as of March 2011, kicking Avenue des Paris’ Champs Elysees, the most expensive premier retail corridor in 2010, to 8^th spot in the global ranking this year. 

Global Top Five Premier Retail Corridor Rents

“Luxury retail is back to its pre-recession levels, outpacing the growth of retail overall,” said Ross J. Moore, Chief Economist for Colliers International’s USA business and author of the global report. “Much of this is aspirational spending on the part of consumers who want a slice of a luxury lifestyle, even if they can’t afford the entire package.”

Colliers International’s researchers found that not only has consumer confidence returned to boost the luxury market, but investor confidence has also pushed luxury brand stock prices significantly higher, including Burberry, Bulgari, Richemont-Cartier and Tiffany. For owners of the world’s premier shopping districts, that confidence enables them to charge substantially higher rent—New York’s Fifth Avenue rents for US$2,150 per square foot, per year, up 72% year-on-year (YoY) over 2010 rates.

Other notable high streets include Zurich’s Bahnhofstrasse, where rents were up 14.2% YoY, and in Moscow, where landlords charged 21.3%YoY more for Tverskaya Street. London’s Old Bond Street and Paris’s Avenue des Champs-Élysées remained solid—still expensive, but with rental rates unchanged compared the last year.

Hong Kong also stands out, with a rent spike on Russell Street, Causeway Bay of 25.6% YoY over 2010 to US$1,510 per square foot per year. While the resurgence of retail is most notable in Hong Kong, virtually every Asian market reported higher rents. On a global basis, premier shopping destinations in Asia are outpacing other world regions. Except Tokyo’s Ginza-Chuo Avenue and Singapore’s Orchard Road seeing retail rents keeping unchanged, the prime retail corridors in Asia recorded increasing rentals with growth ranging from 6% to 29% YoY as of March 2011.

“The vibrant retail market growth in Asia is supported by the continued expansion of economy in the region. With the high spending power of the Mainland Chinese visitors, many international retailers eye on the growing retail markets in the region. In addition to the retailers’ occupation demand, the notable rental increases are also stimulated by the inflationary pressure in Asia,” said Simon Lo, Executive Director of Research & Advisory, Asia.

Retail rents in Bangkok's main retail corridor in Rama I grew by 4% in Q1 2011 QoQ as consumer confidence returned after a difficult 2010.  Patima Jeerapaet, Managing Director of Colliers in Thailand was bullish about the long term prospects for the key retail area. "Luxury brands will always flock to this prime area and rents will command a premium as a result," he said.

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