Download 161025 Global Prime Retail Rents EMEA Final

PRESS RELEASE
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Maria Raimundo
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STRONG DEMAND FOR PRIME RETAIL LOCATIONS DRIVES RENTAL
GROWTH IN EMEA
-London records highest annual rental growth in Europe–
London – 25 October 2016 - New York’s Fifth Avenue continues to command the world’s highest
prime rents for retail space as rental gains in the Americas and Europe outpaced those in the
Asia-Pacific region, according to CBRE’s half yearly Global Prime Retail Rents report.
Global prime retail rents grew by 3.7% in the second quarter (Q2) of 2016 from a year earlier,
buoyed by consumer confidence in the U.S. and limited supply in Europe’s top retail markets.
Regionally Europe, Middle East and Africa (EMEA) saw the strongest year-on-year rental growth
with an annual increase of 6.2% in Q2 2016. London and Milan showed some of the greatest
rental growth, with much of Western Europe’s growth being driven by lack of supply in prime retail
areas.
London takes the top spot for the fastest growing retail location by region as the capital registered
annual prime rental growth of 53.8%, and London’s New Bond Street ranked third with the highest
prime rental levels in the world ($1,684 per square foot per year in Q2 2016).
Rome ranked second in the top 10 fastest growing retail locations and reported a 28.9% year-onyear growth as low availability in prime areas continued to drive rental growth, whilst making it
difficult for international retailers to locate flagship stores. Milan was third with 20% prime rental
growth in Q2 2016 and EMEA and had the fourth fastest growth rate amongst the global markets.
CBRE Press Release
Andrew Phipps, Head of UK & EMEA Retail Research at CBRE, commented: “Retailers are
continuing to see the importance of the physical store and are benefiting from having key stores in
prime areas to grow their brand. It’s interesting to see that among the top five markets for rental
growth are the traditional fashion capitals of London, Milan and New York, demonstrating that
retailers are willing to pay high rents to be present in the most prime areas of these cities, often
where supply and availability of space remains limited.”
Other European markets among the top 10 for prime rental growth included: Sofia, Bulgaria
(12.5%) and Warsaw, Poland (11.1 %). Asia Pacific saw two markets in the top 10: Auckland,
New Zealand (23.7%) and Sydney, Australia (14%). The Middle East had one: Dubai (12.5%).
And the Americas had two: New York (14.3%) and Seattle (11.1%).
The perennial top markets for global retail showed substantial divergence in the past year. Prime
retail rents on New York’s Fifth Avenue between 56th and 58th streets increased by 14.3% in the
past year to $4,000 per square foot per year as of this year’s second quarter. Meanwhile, prime
rents on Hong Kong’s Russell Street declined by 33% to $1,856 per square foot per year amid a
slowdown in tourist arrivals from the Chinese mainland and more prudent spending by locals.
“The cooling off of China’s economy has manifest itself in sharply lower rents in Hong Kong,
which has allowed a new crop of retailers to enter the coveted city,” said Anthony Buono,
Chairman of CBRE’s Global Retail Executive Committee. “At the same time, prime retail rents in
New York can remain stable, but in the near term we will see more landlord concessions to
accomplish rate stability. London, however has such scant supply of available prime space that its
strong rent growth is likely to continue.”
In Manhattan, many international and domestic retailers alike are willing to make substantial
investments to establish a presence for their brand on the world stage of Fifth Avenue’s priciest
blocks. Others are content to gravitate to nearby submarkets that are less expensive but still
highly coveted as retail showcases, such as Times Square, Downtown Manhattan and Brooklyn.
CBRE Press Release
Top 10 Global High Streets By Prime Retail Rent Level:
Market
New York
Hong Kong
London
Paris
Tokyo
Sydney
Zurich
Singapore
Beijing
Guangzhou
Street/Location
Fifth Avenue
Russell Street
New Bond Street
Avenue des Champs-Elysees
Chuo Dari
Shopping center
Bahnhofstrasse
Shopping center
Shopping center
Shopping center
Prime Rent Q2 2016
$4,000
$1,856
$1,684
$1,366
$1,311
$1,003
$906
$857
$827
$805
-EndsCBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the
world’s largest commercial real estate services and investment firm (based on 2015 revenue). The Company
has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through
more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services,
including facilities, transaction and project management; property management; investment management;
appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and
development services. Please visit our website at www.cbre.com.