HK has second most expensive retail rents

PUBLISHED : Friday, 21 November, 2008, 12:00am
UPDATED : Friday, 21 November, 2008, 12:00am

Retail rents in Hong Kong have overtaken those of Moscow, making the city the second most expensive in the world for shopowners, according to the latest global retail rents survey.

Rental rates in Hong Kong reached US$1,236 per square foot, 18 per cent higher than Moscow, according to property consultant CB Richard Ellis, which looked at 50 prime locations around the world at the end of the third quarter.

According to the study, retail rents in Hong Kong rose 11.1 per cent, the 10th fastest in the survey, for the six months to September.

New York's 5th Avenue remains the world's most expensive retail destination, with rental values reaching US$2,200 per square foot.

The demand in the retail market comes from luxury brands and retailers that are reining in wider expansion plans in response to weakening consumer spending.

Bucking the trend, retail rents in Tokyo and Madrid fell 5 per cent in the second and third quarters.

'Although growth rates are slowing in response to deteriorating economic conditions, demand for retail space at the prime end of the market, particularly in fashion hot spots like New York and London, continues to propel rental growth in many cities,' said Peter Gold, head of cross-border retail in Europe, the Middle East and Africa for the firm.

He said retailers were opting for prime space in major retail cities in an attempt to secure the best long-term prospects for their business in an uncertain market.

On the mainland, Guangzhou remains the most expensive retail destination, with rents rising to US$493 per square foot. Its ranking has jumped from the 22nd most expensive retail destination in the first quarter to 13th by the end of the third quarter, in the process overtaking Singapore, which is the 17th most expensive retail destination.

Shanghai jumped from the 37th most expensive destination to 28th in the last quarter.

Rising cost

Retail rents in Hong Kong for the six months to September rose: 11.1%