Location, location, location. And at top of the list is East 57th Street, New York, which has the highest retail rent in the world at $700 per sq. ft. per year.
The area beat out 221 locations in 43 countries, according to "Main Streets Across the World 2001," an annual survey of worldwide retail rents through June 2001 by Cushman & Wakefield, the global real estate services firm in New York.
"57th Street is an international crossroads that attracts people from all over the world," said Susan Kurland, senior director of retail for C & W in New York. "It’s a place where retailers feel they must have a presence."
East 57th Street clearly emerged as the leader with rents one-third higher than the No. 2 location spot, Hong Kong’s Causeway Bay, which came in at $523 per sq. ft. In third place, at $494 per sq. ft., is Paris’ Avenue des Champs Elysees.
Of the countries analyzed, 58% showed rental growth, with 28% experiencing a decline in rents and 14% showing no change. With an increase of 9%, the Asia-Pacific region experienced the strongest retail growth, largely on the back of significant uplift in India, Korea, Thailand and Malaysia. European retail rents also turned in a good performance with a rise of 6.9%.
However, the report doesn’t reflect the current economic conditions. "Clearly conditions are now much more uncertain than back in June and the horrific terrorist attacks on the U.S. are impacting markets," said James Wassel, senior managing director of retail for C & W. "In many areas of the world the immediate depressing effect was quite short lived but the repercussions of the war on terrorism are certainly going to affect tourist locations and sentiment, and may also impact discretionary spending growth as the world economy slows."
Wassel said that after a slow start in 2002, he expects demand to pick up again later in the year due to a stabilizing U.S. economy.