Prime retail rents began to stabilise in many markets across the world in Q3 2009, as economic and retail indicators started to show signs of greater stability and retailer confidence gained positive momentum.
Prime retail rents began to stabilise in many markets across the world in Q3 2009, as economic and retail indicators started to show signs of greater stability and retailer confidence gained positive momentum.
Retail rents globally fell by an average of 1% from Q2 to Q3 2009, according to CB Richard Ellis Group's latest Global MarketView on the retail sector.
New York’s reign as the world's most expensive retail market continued in Q3 despite a 25% rental decline over the past 12 months. Prime New York retail rents ended Q3 at $1,640 per sq ft per annum. Hong Kong and Paris retained their places as second and third in the global rankings, with rents of US$976 per sq ft and US$857 per sq ft per annum respectively.
CBRE said the prime retail markets in Hong Kong, Paris, Sydney and London have demonstrated resilience to the global economic crisis, with stable rents over the past 12 months. Sydney has moved up the global rankings into fourth position; however this is primarily due to the strengthening of the Australian dollar relative to the US dollar. In contrast, Tokyo has seen an 18% decline in rents over the same period, but nevertheless maintained its ranking as fifth most expensive globally.
Peter Gold, head of Cross-Border Retail in the Europe, Middle East and Africa (EMEA) region, commented: 'Although consumers continue to take a cautious approach to spending, consumer confidence has been slowly recovering and is in positive territory in some economies.
'There are undoubtedly more challenges ahead for many retailers, but retailer confidence has also picked up over the course of the year and expansion into key mature markets and prime locations remains firmly on the agenda across many sectors, including grocery and value clothing retailers.'
According to a recent CBRE survey of 220 leading retailers on their expansion plans for 2010 in the EMEA region, on average 73 of the 200 retailers who are looking to expand (36.5%) plan to open more than 10 stores by the end of 2010. Twenty-five retailers (12.5%) are seizing the current market opportunity to expand more aggressively, opening 40 or more stores over the coming year. At the other end of the scale, 43% of retailers are planning to acquire no more than five stores in 2010 in the EMEA region.
