New York’s Fifth Avenue retains its top ranking as the world’s most expensive retail destination at $2000 per square foot, despite recording flat rental growth year-over-year. That was one of the major findings by commercial real estate services firm Cushman & Wakefield in the 33rd edition of its “Main Streets Across the World.”
The survey, which examines retail rental rates in prime locations in cities around the world, also found that Milan’s Via Montenapoleone jumped a spot into second with a rate of $1766, displacing Hong Kong’s Tsim Sha Tsui, which placed third in 2023 at $1493.
“The retail sector has continued to face issues head on while demonstrating its resiliency. The near-term outlook for the retail sector remains cautious, but at the same time is nuanced between sub-sectors and geographical locations,” said Barrie Scardina, C&W’s Head of Americas Retail. “At the macro level, the focus is on the strength of consumer spending. As central banks have undertaken one of the most aggressive interest rate hiking cycles in decades, consumers have shifted spending patterns and are reining in non-discretionary expenditure.”
The report focuses on headline rents in best-in-class urban locations across the world which, in many cases, are linked to the luxury sector. The study found rental values in this segment have been relatively immune to additional discounts, incentive packages or shared-risk rental models that have become more prominent in the wider retail markets globally.
Another noteworthy finding: almost 60 percent of markets globally remain below pre-pandemic rental levels. This is especially true in Europe, where 70 percent of the markets tracked are below pre-pandemic rents. In contrast, in the U.S., only 31 percent are below pre-pandemic level.
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