According to global property advisor, CBRE Group, three Australian cities rank among the most expensive retail locations in the world, despite significant rent fluctuations and ongoing consumer caution.
New research from CBRE Group claims that Sydney has retained its ranking as the third most expensive retail city in the world, despite a 14.7 percent dip in super prime retail rents. Melbourne placed seventh in the rankings after a much stronger year during which rents jumped by 20.8 percent – the biggest increase of any city in the Top 40 rankings.
Brisbane rents declined by 15.3 percent – the largest drop of any city in the Top 40. However the city still maintained its place at No 11 in the global rankings.
In New Zealand, Auckland scrapped into the Top 40, dropping from 36th to 37th place after a steady year during which super prime CBD rents were unchanged.
Stephen McNabb, CBRE Australia’s head of research, said there was underlying competition from new foreign retailers for the more limited supply of super prime retail space in Melbourne.
‘Rent levels in the upper tier of the market are still lower in Melbourne than in Sydney which may have given room to manoeuvre for retailers wanting exposure to a prime strip in what has been a stronger retail market,’ said Mr McNabb.
He said that CBRE expected the gap between the two cities to narrow.
The report says that Hong Kong is the world’s most expensive shopping destination as significant inbound tourist flows and continued increases in domestic wealth fuels occupier demand from international fashion and luxury retailers.
Hong Kong remains at the top of the rankings with retail rents at US$3864 per square foot (psf) per annum. New York retained the number two position at US$2475 psf annum. Both cities experienced significant increases in retail rents quarter-over-quarter.
The remaining top five rankings were also unchanged from the prior quarter: Sydney (US$1112 psf per annum – or $11,560 per square metre ) was third, followed by Tokyo (US$1025 psf per annum), with London (US$956 psf per annum) completing the top five. Melbourne retails rents were US$837 psf or $8700 psm according to the report.