Fifth Avenue Retail Rents Lead the World

Manhattan’s Fifth Avenue remained the most expensive global retail location as Upper Fifth Avenue rents reached $3,500 per square foot, reported Cushman & Wakefield, New York. 

Rent for retail space between 49th and 60th streets on Fifth Avenue increased 3.6 percent year-over-year, placing the area 46 percent above second-place Causeway Bay in Hong Kong, where rent averaged $2,399 per square foot.

C&W analyzed the top 500 retail streets around the globe and ranked them by their prime rental value. It found that retail rents rose in 35 percent of streets around the world over the past 12 months despite increasing global uncertainty.

Gene Spiegelman, C&W vice vhairman and head of retail services, said he expects the Americas to maintain a “positive trajectory” going into 2016, “bolstered by a steady consumer sector benefiting from a material reduction in energy costs and stable employment expectations, especially in the U.S.”

Regionally, the United States houses seven of the top 10 most expensive cities in the Americas, with Toronto, Rio de Janeiro and Vancouver in sixth, seventh and eighth places respectively. Los Angeles’ Rodeo Drive corridor posted the highest retail rents outside New York at $800 per square foot, up 23 percent year-over-year.

Spiegelman said strong tourism and a vibrant local economy make San Francisco’s Union Square a market to watch with just 1.1 percent vacancy, $650 per square foot rents and 13 percent rent growth following 21 percent rent growth for the same period a year ago. Similarly, Chicago’s Michigan Avenue posted 8.2 percent rent growth with average retail rents of $525 per square foot. 

At $320 per square foot, Toronto’s Bloor Street retail corridor represented Canada’s most expensive high street, while Edmonton’s Whyte Avenue was the most affordable prime retail street in the Americas at $45 per square foot.

Spiegelman said most retailers continue to add physical stores to support their expansion plans while at the same time building their online footprint to respond to the ongoing “clicks and bricks” evolution. “[But] international luxury brands will continue to dominate the high street, providing a boost to the key destination cities with high exposure from tourism and strong foot traffic,” he said.