Nov 17, 2016
New York's 5th Avenue still the world's most expensive shopping street
Nov 17, 2016
According to a survey by real estate consultants Cushman & Wakefield, for the third consecutive year New York's 5th Avenue ranks as the world's most expensive shopping street, ahead of Causeway Bay on Hong Kong island and the Champs-Elysées in Paris.
The renowned New York thoroughfare snatched first place from its Hong Kong rival in 2014, after the Asian shopping district led for two years.
The two districts are well ahead of their competitors in terms of costs, with average rentals of $29,065 per m2 in New York (approximately €27,000 at current exchange rates) and $27,884 per m2 in Hong Kong.
These rental costs, according to a press release issued on November 16 by Cushman & Wakefield, as part of the MAPIC commercial real estate show being held this week in Cannes, are twice as high as those of the other leading shopping streets elsewhere in the world.
This year, the two cities have posted a decrease however, as major international brands are streamlining their store pools in favour of their e-commerce websites.
As a result, the value of 5th Avenue's average commercial rent has fallen by 14% compared to 2015. It is the first time since the end of the financial crisis that the New York thoroughfare recorded such a slump, underlined Cushman & Wakefield, forecasting that the trend will continue in 2017.
Why? Brands and distributors listed on Wall Street are driven by the markets to keep chasing profits, and are urged to close down their less profitable stores. This trend is affecting the majority of shopping high streets in the USA. Also, retailers have reduced their demand for large, high-rent flagship stores in New York.
As for Hong Kong, both the impact of the Chinese economy's slow-down and the competition from e-commerce, which is well-established in China, are forcing distributors and brands to revise their retail development strategies downwards. Causeway Bay rental costs have fallen by 15% this year, having decreased by 12% last year.
The Champs-Elysées in Paris maintains the third place worldwide, and are ranked first in Europe, with an average commercial rent of $13,255 per m2 (approximately €12,300).
The figure is stable compared to last year, despite the decline in both the number of tourists and in their average expenditure basket on the celebrated Parisian avenue, notably in the wake of the terrorist attacks which shook France.
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