Retail rents continue to rise in the world’s most expensive shopping streets
• Honk Kong’s Causeway Bay remains the costliest retail location in the world. Rents in the local shops amount to almost EUR 25,000 per sq m per year.
• New York’s Fifth Avenue is in second place and Avenue des Champs-Elysées in Paris is third.
• Prague is the most expensive destination in Central Europe, retaining a significant edge over Budapest, Warsaw and Bratislava.
Hong Kong’s Causeway Bay remains the world’s most expensive retail location for the second year running, according to global real estate consultant Cushman & Wakefield’s flagship retail research report Main Streets Across the World. Prague’s Na Prikope Street has moved up one position from 26th to 27th place with rents stable in the long term perspective and amounting to up to EUR 2,160 per sq m per year.
The Main Streets Across the World study is being published for the 25th time this year. Generally recognised as the barometer for the global retail market, it includes a ranking of the most expensive locations in the top 334 shopping destinations across 64 countries.
“Prague’s high streets of Na Prikope, Wenceslas Square, and the luxury-oriented Parizska retain a clear edge in Central Europe. Competition between brands keeps the rents at those addresses two to three times higher than in other Central European locations,” says Jan Kotrbáček, Partner and Head of the Retail Team at Cushman & Wakefield for the Czech Republic and Slovak Republic.
Compared with high street in Budapest (Vaci utca), Warsaw (Nowy Swiat) and Bratislava (Obchodna ulica), Prague has a major advantage in the historical centre of the town which is very attractive for tourists. At the same time, Na Prikope, Wenceslas Square and Parizska are well ahead of other Central European capitals in terms of the structure and concentration of the brands represented.
„Unlike Prague, Bratislava can not boast luxury retail high streets that could potentially rival for example, Eurovea shopping mall which is located in the city cente. Eurovea does offer a mixture of premium brands and together with nearby local amenites provides an attractive environment for both shopping and cultural activities,“ says Matúš Furman, Head of Retail Department at Cushman & Wakefield in Slovakia.
„Obchodna Street is a busy street with established brands that cater to the masses and to that extent does not offer the same retailer choice as Eurovea. The current weaker purchasing power and economic climate are having a direct impact on the market and the opportunities it can offer, and for that reason, the trend of lower quality retailers occupying units on Obchodna Street is set to continue. Its also worth noting that the market of luxury fashion is greatly influenced by the proximity of Vienna, where global brands have already established themselves,“ adds Matúš Furman.
Champs Elysees in Paris is Europe’s most expensive shopping street. During the last twelve months, the rents in the area have grown by almost 40 percent to the current EUR 13,225 per square meter per year. As a result, Paris leaves London’s New Bond Street, the world’s fourth most expensive destination (EUR 8,666 per sq m per year) behind with a notable gap.
“The rents in Prague’s main shopping streets are around two thousand euro per square meter per year these days. And there is a clear trend suggesting that this level will continue increasing. The principal reasons are the tourist attractions of Prague, the structure of retailers in the streets, and the resulting strong interest of the global brands’ mother companies in opening their flagship stores in Prague,” says Jan Voslář, Head of Cushman & Wakefield’s High Street Team.
Stores operated directly by their mother companies move the operators of franchise and multi-brand concepts futher of the most prestigious locations. As a result, the end customers can benefits in the form of access to broader current collections and more benevolent pricing policies than at partner shops.
“Due to the saturation of prime high street and the strong demand for those locations, we are seeing – in addition to growing rents – a tendency where global brands spread into the neighbouring streets such as Havirska, 28. rijna and Narodni trida. The luxury shopping destination of Parizska apparently expands into Siroka, Zelezna and Dlouha, for example. We perceive this trend as natural and favourable for the future development of shopping in the city centre,” Jan Voslar adds.
The newly arriving brands that have recently opened or plan the opening of their presentational outlets in Prague’s most attractive locations include Berschka (from Inditex Group), Deichmann, Pandora, C&A, and Tommy Hilfiger, and luxury brands such as Jimmy Choo, Karen Milen and Tiffany&Co.
When Main Streets Across the World was first published in 1988, the most expensive retail city globally was New York, followed by Munich in second place, Tokyo in third, Paris in fourth and London in fifth.