This article is from the Australian Property Journal archive
RETAIL rents in Pitt St Mall are the fastest growing of the world’s top 10 most expensive precincts, the Sydney CBD shopping icon is the world’s seventh priciest overall.
According to Cushman & Wakefield’s Main Streets Across the World report, Hong Kong’s Causeway Bay remains in number one spot, commanding US$2,745 per sq ft.
New York’s Upper 5th Ave, between 49th and 60th Sts came in second, at US$2,745 per sq ft, followed by New Bond St, London (US$1,714 per sq ft), Avenue des Champs Elysees in Paris (US$1,478 per sq ft), and Milan’s Via Montenapoleone (US$1,447 per ft). Ginza, Tokyo was next, at $US1,251 per sq ft.
Pitt St Mall’s dramatic 17.9% increase in retail rents to $16,500 sqm – at US$1,076 per sq ft – was higher than any other top 10 ranked global retail location, supported by strong demand from retailers for innovative flagship stores and growing store footprints among major cosmetics and luxury brands.
“Pitt Street Mall continues to hold its place among the most popular retail destinations worldwide. Rents in Sydney’s retail core have reached new highs as retailers focus on evolving the customer experience and trialling new store formats to attract shoppers,” national director of retail leasing, Cushman & Wakefield Australia and New Zealand, Matt Hudson said.
Aesop recently introduced an amphitheatre for customers within its new global flagship store that set a new record for retail rents on Pitt St Mall.
“Higher footfall areas around Pitt Street Mall are becoming more hotly contested with strong demand from high-end luxury and footwear retailers for flagship sites along George St and King St. As a result, we’ve seen rents almost double along George St as it opens up for business following the completion of the light rail. This has also presented an opportunity for landlords to reposition their sites,” Hudson said.
Valentino has just announced a new flagship spanning two levels across 765 sqm on the corner of Castlereagh St and King St, within the MLC Centre at which Dexus is currently undertaking a $170 million overhaul. Construction commenced in June in June on the new 6,000 sqm luxury retail and dining precinct across four levels.
Tiffany & Co.’s recently opened its Sydney flagship store at 175 Pitt St, also owned by Dexus.
“While there has been a stellar rise in rents along Pitt St Mall, there is an increasing polarisation and rising pressure on incentives in many lower foot-traffic locations across Sydney. For these areas, rents are more likely to be stable rather than rising as retail conditions remain challenging and online competition continues to gather pace,” Hudson said.
Melbourne’s Bourke St Mall maintained its position as seventh-dearest in the Asia Pacific region at $7,000 per sqm, while Brisbane’s Queen St fell one position to tenth in the APAC region, with retail rents averaging $4,500 per sqm.
The 2019 report tracks rents for 448 locations across 68 markets.
