TOP FASHION RETAIL SPOTS ON THE DOWNSWING
Rents in some primary locations are losing ground
While Upper 5th Avenue remains the world’s most expensive retail street in terms of rent, with Causeway Bay in Hong Kong nipping at its heel and Paris’ Avenue des Champs Élysées third, according to Main Streets Across the World, a report by Cushman & Wakefield, overall rental value for shopping high streets dipped slightly this year.
Monitoring 462 of the top retail streets worldwide, the real estate company values the decrease as a consequence of brands seeking to balance the demands of physical and online presences.
Upper 5th Avenue saw its first decrease in annual rents per square foot since the financial crisis with prices dropping from $3500 in 2015 to $3,000 per square foot this year. Vacancy rates, meanwhile, jumped to 15.9 percent from 10 percent a year earlier.
Yet together with Causeway Bay, they are both more than twice as expensive as the leading street in any other country, says the report.
Fashion district flagships, once considered a traffic and advertising need, are losing their importance to retailers. This is because often sales at these prime locations haven't kept up with rent, and retailers are under extreme pressure to cut their operating expenses, according to Cushman & Wakefield retail research VP Garrick Brown.
Conversely, there are a number of streets on the uptick with rents climbing significantly. Besides London’s New Bond Street and Japan’s Ginza districts, Milan’s Via Montenapoleone logged in a 20 percent growth over the year to June, cementing its third position in the EMEA market thanks to its appeal for both mass market and luxury retailers. The French capital, instead, is home to five of the top most expensive high streets within the EMEA region.
Justin Taylor, Cushman & Wakefield’s, Head of Retail, EMEA, said: “Retailers are facing technological advances head on, with more and more brands opting to offer online sales alongside, not instead of, a physical presence. Demand is strong for the right space in the right location and the lack of supply along the majority of Europe’s main thoroughfares is seeing rents rise further and expanding the boundaries of well-established streets.”
According to Gene Spiegelman, Cushman & Wakefield’s Vice Chairman, Head of Retail Services, North America, said: “Throughout 2016 the Americas region has benefited from stable consumer spending that has been sustained by steady employment and lower energy prices. This is an enduring trend from 2015 that we forecast to continue into 2017. The larger question, for 2017 and beyond, will be the unrelenting rebalancing of sales origination – bricks and mortar versus e-commerce.”