LONDON — Despite the uncertain political and economic landscape across Europe, the region’s biggest shopping thoroughfares continue to flourish, attracting international tourists and premium brands who are willing to pay steep rent to secure prime retail locations.
According to Cushman & Wakefield’s latest “Main Streets Across the World” report, which will be published on Wednesday, London’s New Bond Street has risen to become the third most expensive street in the world — it was previously in the fifth spot — while Milan’s Via Montenapoleone rose from the sixth to the fourth place in the ranking.
The annual report tracks 451 of the top retail streets and creates a ranking based on rental values.
In 2017, rents on Bond Street rose 7.5 percent, to $1,720 per square foot, year-over-year, with activity quickly recovering from the slowdown caused by the Brexit referendum. In Italy, cities popular among wealthy tourists such as Milan, Florence and Turin, also saw steady growth.
The Champs Élysées in Paris was ranked fifth in the list — it was third last year — although rents remained unchanged and the city saw a significant recovery in tourism in the last year, with strong footfall from domestic and overseas visitors.
“While challenges and uncertainties remain, Europe’s retail recovery has continued and a further strong performance is anticipated for 2018,” said Justin Taylor, Cushman & Wakefield’s head of retail, EMEA. “Half of the top 10 most expensive high streets are in Europe, which reflects strength of demand. Prime locations have the edge in attracting the most innovative and premium brands, and rising rents in some areas have been helped by strong tourist numbers. This includes the U.K., where the lower sterling has increased visitor numbers significantly and London’s premium retail offer continues to thrive despite the noise around Brexit. Meanwhile, growth in Milan, Turin and Florence underlines Italy’s pulling power as a retail destination.”
New York’s Fifth Avenue and Hong Kong’s Causeway Bay retained the first and second spots on the ranking, respectively. Rents on Fifth Avenue remained unchanged at $3,000 per square foot per year, while other areas in Manhattan, such as the Meatpacking District, Times Square and SoHo, saw slight decreases in rents.
In Hong Kong, even though Causeway Bay remained at the second place, rents fell by 5 percent, due to a decline in tourism from mainland China.
Darren Yates, the report’s author and head of EMEA retail research at Cushman & Wakefield, said despite ongoing challenges in the retail scene, streets such as Fifth Avenue, Bond Street and Causeway Bay remain highly sought-after as brands aim to create engaging experiences for the consumer.
“Despite a lot of negative headlines, global retail remains as dynamic and vibrant as ever in response to technological and demographic change across the world. The most innovative retailers are combining their online and physical platforms to create a seamless omnichannel experience for the customer, but profile and location play such a crucial role in the premium retail experience.”