World's main shopping streets 'resilient' to global squeeze

The world's main shopping streets are proving largely resilient to the global economic downturn, according to Cushman & Wakefield. In its 23rd annual Main Streets Across the World report - published on the first day of the Mapic retail real estate fair in Cannes on Wednesday - the broker revealed that retail rental levels are rising or at least remaining stable in 94% of 236 streets monitored.

Cushman & Wakefield said the report provides a global barometer of the strength and popularity of shopping streets in 48 countries.

New York’s Fifth Avenue is once again the world's most expensive shopping street where retailers can now expect to pay rents of $1,850 per square foot (EUR 12,612 per m² ) of sales space per annum, an increase of 23% on 2007. Gene Spiegelman, executive director of Cushman & Wakefield New York said: 'Through mid-year 2008 Fifth Avenue consolidated its position as the world's most expensive retail address with prime rents around $1,850 per sq ft. Ground level retail rents, however, broke the $2,300 sq ft barrier with the lease to Abercrombie at 666 Fifth Avenue. Fifth Avenue continues to deliver the key retail drivers of high turnover and high profile brand positioning in front of international consumers.

'As we close 2008, we anticipate retailers will critically assess substantial rent and capital commitments but will continue to exploit the value of limited prime main street positions in keeping with long-term strategies,' Spiegelman said.

The most expensive streets in Hong Kong, Paris, Milan and Dublin make up the rest of the top five but London and Tokyo have dropped down to six and seven respectively. Dublin has been the best performer in the top ten with the city's Grafton Street rising two places in the ranking to enter the world's top five most expensive streets for the first time. Retailers entering the street can now expect to pay $824 sq ft (EUR 5,621 m2) m per annum, a rise of 5.3% on 2007.

Rents on Turkey's main streets have all shown big rental increases with five of the top ten strongest growth locations being in either Istanbul or Ankara. Rents on the European side of Valikonagi Caddesi have increased 114% over the year with rents on the Asian side of Bagdat Caddesi increasing 96%. Turkey’s most expensive street, the European side of Abdi Ipekci, rises in the overall ranking from 32nd to joint 24th.

Gulsin Hakman, head of retail at Cushman & Wakefield Turkey, said: 'In 2008 cities with high consumer potential have grown faster than ever before. Both domestic and overseas retailers have been looking to increase their market share and consolidate their market position. Many have therefore been opening new stores on both the country's main shopping streets and in the increasing number of new shopping centres (with many of the new developments now in the smaller Anatolian cities.) This has led to higher rents which, together with the increased cost of distribution and staff salaries, has put into question the sustainability of some retailers' expansion plans."