Causeway Bay retail rents glued in global rankings
Causeway Bay retail rents are so out of line with international levels that continuing declines are unlikely to impact on its status as Asia’s most expensive high street strip.
Data released by Cushman Wakefield this month – albeit more than a year out of date – shows Hong Kong’s premium retail strip retaining its position as the world’s second most expensive street for retailers to set up shop. It should be noted, the list ranks the most expensive strips in each country, not overall.
While rents fell 12 per cent in the year to June 2015, there is such a huge gap on either side, the second place is unlikely to be ceded any time soon, even if retail sales in the territory continue to fall.
Topping the chart is New York’s Fifth Avenue, with an average rent of US$3500 per sqft per year. Causeway Bay is next at $2399 and the Champs Elysee in Paris a distant third at $1372. The Ginza in Tokyo, Japan ranks a modest eighth at $881.90 in a virtual tie with Myeongdong in Seoul, Korea at $881.80. The Ginza has fallen from sixth in last year’s survey, while Myeongdong has dropped from eighth.
No other Asian country makes the top 10, although Singapore’s Orchard Rd has surprisingly jumped from 17th to 14th at $336.80. And Vietnam’s Ho Chi Minh City CBD retail rents are more expensive than in Bangkok at $150.50 for 32nd place, and $125.40 for 35th respectively.
Cushman & Wakefield noted in its commentary that retail rents in Central, Tsim Sha Tsui and Mongkok all fell by between 11.9 per cent and 13.9 per cent in the year to June 2015, “paving the way for a more tenant-friendly environment”.
In addition, the tariff reduction on certain fast moving consumer goods imposed by the Chinese government to boost domestic Chinese consumption is impacting on [retail] demand. From a positive angle, the lower rental levels will create opportunities for luxury brands and high street retailers to enter the market such as Monica Vinader, Sotheby’s Wine, Claudie Pierlot, Rebecca Minkoff, Perrin Paris and Filson.
“However, going forward, interest rate hikes and concerns over the property market will likely impact demand from 2016 and thus see retail sales growth decline,” concluded the report.