This article is from the Australian Property Journal archive
SYDNEY’S Pitt Street Mall was the eighth most expensive retail destination in the world, as retail rents in prime global locations hold strong despite challenges facing the sector at large.
According to Cushman & Wakefield’s Main Streets Across the World report, Fifth Avenue in New York held on to the top spot as the most expensive retail destination in the world, with Milan knocking out Hong Kong and taking second place.
Globally, prime retail rents were up 4.8% on average year-over-year, with the Asia Pacific recording the highest level of growth at 5.3%, followed by the Americas at 5.2% and Europe at 4.2%.
Global rental levels are also still remain below pre-pandemic levels in 55% of markets, or 70% of markets in Europe, 51% in APAC and 31% in the Americas.
“Retail has continued its path to recovery despite a new wave of post-pandemic challenges as central banks around the world have increased interest rates to tame the current inflationary cycle,” said Dominic Brown, report author and head of international research for Asia Pacific at Cushman & Wakefield.
“In response, economic growth forecasts have been trimmed and consumers have reigned in discretionary spending.”
Like Fifth Avenue, Pitt Street Mall was in the top end of the rankings despite recording flat rental growth year-over-year. With Sydney’s prime mall seeing a 24% decline since before the onset COVID-19 pandemic.
“In the global marketplace, Sydney’s Pitt Street Mall stands tall, holding its reign at 8th worldwide and proudly securing the 5th spot in the regional Asia Pacific arena,” said Brown.
“As rents echo a pre-COVID cadence, the city’s resilience signals a potential ascent in the rankings, painting a promising picture of Sydney’s retail rebound.”
While not making the top 50 in global rankings, Melbourne’s Bourke Street Mall managed to take the 18th spot in the Asia Pacific region.
“Currently undergoing significant transformations, the iconic Bourke Street retail area is in the midst of two major redevelopment projects. The recently announced opening of a Mecca Cosmetica flagship, spanning over 3000 square meters, adds to the city’s dynamic retail landscape,” said Michael DiCarlo, director of retail leasing at Cushman & Wakefield.
“In the face of global economic uncertainties, Melbourne’s retail sector has adeptly overcome challenges by expanding luxury brands along Collins Street and enhancing premium hospitality options in the surrounding streets and lanes.”
Brisbane’s Queen Street Mall moved up three places this year, just moving into the Asia Pacific’s top 25 rankings.
“Asia Pacific’s traditional prime retail destinations have continued to command strong rents, accounting for four of the top ten most expensive locations globally,” concluded Brown.
“The region recorded an average 5.3 percent rental growth year-over-year which, combined with a comparatively strong economic outlook for 2024, bodes well for the retail sector’s continued recovery in key luxury markets.”
