Paris’ Avenue des Champs Élysées is the most expensive retail street in Europe and narrowly ahead of London’s New Bond Street in second place, according to a global research report out today from Cushman & Wakefield.
The ‘Main Streets Across the World’ report tracks over 500 of the top retail streets around the globe, ranking them by their prime rental value utilising Cushman & Wakefield’s proprietary data. The 27th edition of the report shows that rents have risen in 35% of streets around the world – despite the increased global uncertainty experienced over the past 12 months.
Paris’ Avenue des Champs Élysées remains the most expensive retail location in Europe, with rents at €13,255 sq.m/yr, just ahead of New Bond Street in London, which commands an average price of €12,762 sq.m/yr. From a global perspective, the two streets are third and fourth, respectively, behind Causeway Bay in Hong Kong (€23,178 sq.m/yr) and New York’s Upper 5th Avenue (€33,812 sq.m/yr).
Justin Taylor, Head of EMEA Retail at Cushman & Wakefield, said: “Improving employment prospects, rising real wages and healthier consumer confidence in advanced economies are set to offer more positive momentum for the retail sector.
“From an EMEA perspective, despite any economic and political uncertainties in certain countries, the retail market is expected to see further improvements. Indeed, a strong retail sales growth forecast, robust occupier demand and a lack of supply in many locations mean rents will keep rising in the most popular high streets. Tight availability is shaping the retail landscape, pushing the geographic boundaries of well-established high street markets outwards.”
France has the highest number of expensive high streets within Europe, all of which are located in Paris. While prime rents on Avenue des Champs Élysées remained unchanged, rents across the majority of other Parisian high streets recorded positive growth in the year to June 2015. This was most notable on Place Vendôme/Rue de la Paix (20%) and Rue Saint-Honoré (20%).
Strongest rental growth this year in Europe was recorded in Dublin’s Grafton Street and Covent Garden in London, as well as in top high streets in Milan and Rome. However, high streets in Russia and Ukraine experienced sharp falls linked to the geopolitical conflict in the region that yielded slowdowns in economic growth and consumer spending.
Prime high streets in Stockholm and other key regional cities in Sweden continue to outperform, but the lack of suitable space is pushing more retailers to assess opportunities on streets adjacent to the main thoroughfares. There is a better availability of space in secondary and in non-central high streets, but demand is still selective in these locations.
Elsewhere, although Turkey reported the highest rental growth in EMEA in 2014 – most notably in Istanbul on Caddesi at 24.4%, Istiklal Street at 27.3% and Abdi Ipecki 20.9% – over the 12 months to June 2015, the majority of high street locations in Istanbul, Ankara and Izmir saw little to no rental growth. However, occupier markets are performing solidly, with healthy demand from a broad range of local and international retailers whom are mainly targeting prime high street shops and well-located shopping centres in key cities.