London’s New Bond Street is the costliest place in Europe and the UK to locate a retail store, according to new data from Cushman & Wakefield. The location is third globally behind Hong Kong’s Causeway Bay which is the world’s most expensive shopping street and New York’s Upper 5th Avenue.
The annual ‘Main Streets Across the World’ report tracks rents for 448 locations across 68 markets – the largest number ever included since it started in 1988. The report ranks locations by their prime rental value using Cushman & Wakefield’s proprietary data.
Last year Causeway Bay ended five years of domination by New York’s Upper 5th Avenue and in the 2019 rankings, it retains its position with rents to locate a store amounting to $2,745 per sq ft/ year. Upper 5th Avenue is in second place at $2,250 psf/yr, with London’s New Bond Street third in the global list, with annual rents at the London thoroughfare having risen 2.3% in the past 12 months to $1,714 per psf/yr. The Avenue des Champs Elysées in Paris ($1,478 psf/yr) and Milan’s Via Montenapoleone ($1,447 psf/yr) complete the top five. Five of the top 10 global streets were in Europe, with four in Asia and just one in the US.
In the UK, the top 10 is dominated by locations in London with Manchester’s Market Street ranking as the ninth most expensive retail location with rents amounting to £285 psf/yr (Zone A), up 1.8% from 2018.
George Lowe of Cushman & Wakefield’s National Retail & Occupier Services team in Manchester said: “We have seen rents in Manchester’s prime locations remain resilient over the last period, despite wider structural changes in the retail market. Market Street, still considered Manchester’s prime pitch, has been particularly resilient, with operators including Metro Bank and Uniqlo opening in prime positions along the parade. As highlighted in the research, we have seen operators consolidating their portfolios into fewer, better situated sites. The Clydesdale Yorkshire Bank, for instance, has closed several sites in smaller Northern towns, whilst opening a flagship store along Market Street in the last 12 months.”
Report author Darren Yates, Head of EMEA Retail Research at Cushman & Wakefield, said: “In terms of rental performance, this year’s results are encouraging and demonstrate the resilience of the premier retail locations. Rents on the world’s top retail streets have been fairly stable and there is greater clarity on where retail is heading. However, there is downward pressure on rents in many weaker locations, particularly in the more mature markets of Europe and North America. In Asia Pacific, retail has generally performed well across a very diverse group of markets.
“Online sales continue to increase around the world, but while much of the narrative is focused on the challenges the internet poses for traditional bricks and mortar, the relationship between the two is more complex. While quantifying the value of the store has become more difficult, it remains an important touchpoint for the consumer and generates both in-store and online sales by acting as a showroom and creating a wider brand presence – the so-called ‘halo effect’. The most successful retailers will be those who best integrate their physical and online operations to create a seamless, positive brand experience for shoppers.”