Causeway Bay’s Russell Street trumps 5th Avenue in New York as the world’s most expensive retail rental market
- Average annual rents in Causeway Bay stood at US$2,671 per sq ft at the end of second quarter
- Sixth time in 30 years that Causeway Bay has been ranked number one
Russell Street in Hong Kong’s Causeway Bay district has replaced New York’s Upper 5th Avenue as the world’s most expensive retail street by rental value, according to property consultants Cushman & Wakefield.
For the first time in five years, the city has regained the crown, with average annual rents of US$2,671 per square foot (HK$20,953) despite a small decline of 1.5 per cent in average rents, according to the company’s annual Main Streets Across the World report, released on Wednesday morning.
This was also the sixth time Causeway Bay has had the distinction of being named the world’s most expensive retail location.
The report, now in its 30th year, tracks 446 of the top retail streets around the globe, ranking them by their prime rental value as of the second quarter of 2018.
Cushman & Wakefield’s proprietary data includes a list of the most expensive streets in 65 countries and regions.
Upper 5th Avenue in New York slipped to second place globally, with average annual rents of US$2,250 per sq ft compared with US$3,000 per sq ft in the previous 12-month period as vacancy increased. The report said rents had fallen by 25 per cent because of the increased vacancy.
London’s New Bond Street meanwhile is the most expensive European location and third globally. Annual rents here were broadly flat year-on-year at US$1,744 per sq ft, underlining the fact that luxury and high-end retailers still see the UK’s capital as a key retail destination.
Beijing’s Wangfujing has become the most expensive street in China, with rents on average costing US$482 per sq ft a year, ranking 11th worldwide.
“The retail market in Hong Kong has experienced a rebound over the last year, driven mainly by a return of mainland Chinese tourists,” said Kevin Lam, Cushman & Wakefield’s head of retail services for Hong Kong.
Maureen Fung Sau-yim, executive director of Sun Hung Kai Real Estate Agency, said the number of mainland tourists would remain high if the yuan fell further.
Fung manages 38 shopping malls with a gross floor area of 10 million square feet in Hong Kong and mainland China.
One of them, APM, in Kwun Tong, was among the first to introduce round-trip direct buses from the mall to Zhuhai and Macau.
“Since the opening of the Hong Kong-Zhuhai-Macau Bridge on October 24, APM has been running 780 round-trip direct buses to Zhuhai and Macau, serving 25,000 passengers, in which 80 per cent of them are Macau tourists who came for a one-day tour,”she said on Wednesday.
Each of these visitors spends between HK$500 and HK$800, mainly on dining, cosmetics, and personal care.
“APM aims to draw as many as 100,000 monthly visitors to the mall. Extra part-time staff are being hired to support the new demand,” adds Fung.