Australian Property News

New York still the world's most expensive retail destination, but Sydney third, then Melbourne and Brisbane

Posted on Tuesday, November 29 2011 at 2:03 PM

Start spreading the news -  the commercial market in New York continues to thrive, with the city still the world's most expensive place to own a shop.

Rents along the famous shopping strip, Fifth Avenue, remain at US$1900 per square foot per annum. Hong Kong is in second position with annual rents rising by 52.8 per cent to US$1695 per square foot per annum. Sydney is now the third most expensive destination to rent out a shop, with rents of US$1224 per square foot per annum. In fact, Sydney even beats London (fourth place at US$961 per square foot per annum).

Melbourne came in at eighth place and Brisbane ninth. CBRE regional director of retail services, Joshua Loundon, attributed Australia's high ranks to the limited amount of prime retail space available and the competition from new market entrants.

"Over the course of the next 12 months, we would expect that the Australian markets would slip slightly down the rankings, due to numerous challenges faced by domestic retailers, in particular the record levels of outbound tourism, together with increasing labour and utility costs that have placed further pressure on occupancy costs," Loundon says.
Asia, in particular, has seen significant levels of occupier demand in destinations such as Singapore, China and India, while retailers in the US and western Europe, in general, remain more cautious.

"Retails continue to expand in most key regional markets in Asia, with major international groups in the fast fashion and luxury sectors being particularly aggressive," Loundon says.

"In Hong Kong, retails across all sectors are looking to expand their footprint to tap into high levels of spending by tourists. In Australia, global brands continue to open new stores, however many domestic retailers are consolidating as shoppers flock to the new foreign entrants in the market."