perthwa
November 8th, 2004, 04:28 AM
Europe shops push Sydney aside
Sydney’s famed Pitt Street retail precinct has slipped in world rankings.
Strong rental growth in a number of European economies including some emerging markets have largely attributed to Sydney’s high profile Pitt Street Mall shopping strip dropping from 5th place to 8th place in the annual Main Streets Across the World survey of global retail rents conducted by Laing+Simmons Commercial’s worldwide affiliate, Cushman & Wakefield Healey & Baker.
Main Streets Across the World 2004 tracks retail rents in the world’s top 229 shopping locations across 45 countries around the world. The report’s global league table is drawn up by taking the most expensive location in each of the countries monitored.
It is the first time in four years that Pitt Street Mall has not been in the top five retails locations in the world.
Even though rental rates have remained stable in the Pitt Street at around $5,000 per sqm/annum over the last 12 months to June 2004, today’s results see Pitt Street Mall coming in behind Dublin, Munich and Moscow.
Commenting on the movement of these locations, L+S Commercial chief executive Robert Farrell said emerging European markets have seen substantial increases in global interest in their markets which had reflected in similarly substantial increases in rental rates.
For example, Dublin’s Grafton Street shopping strip has leaped from $3,968 to $ 5,730 in just the last 12 months to June 2004.
“Nevertheless, Sydney still ranks high in Asia, coming in at second place behind Hong Kong’s Causeway Bay which has seen an increase in rentals of 54% in local currency terms, over the last 12 months, as a relaxation in visa requirements for tourists from mainland China has benefited the retail sector.”
Farrell believes that Westfield’s greater hold on the Pitt Street Mall will have a positive impact on the strip.
“Until now, there has been no coordinated or structured effort in developing an effective overall tenancy mix across the major shopping arcades off Pitt Street Mall including Glasshouse, Centrepoint, The Strand Arcade, Mid City Centre and the Myer complex, amongst others.
“Unlike the large-scale approach taken in major regional shopping centres, each of the individual shopping areas in Pitt Street have historically only been concerned with their own tenancy mix,” he said.
“With Westfield taking control over some 40% of Pitt Street Mall, I think we will see the rules of regional centres applied, resulting in improved turnover and profits for tenants and subsequently greater rentals,” he added.
”Most countries in the Asia Pacific region have experienced solid economic recovery over the past 12 months which is being driven by China and assisted by the wider global recovery. As a result, many international retailers have reacted quickly to expand their presence in places like Hong Kong, Japan and Singapore. Rentals in these cities have resulted in significant increases since mid last year,” Farrell.
Tokyo’s main high street, Ginza, is in third place on the Asia Pacific ladder and is the fast climber is the Asia stakes moving up six places from 2003 to be ranked 9th.
Commenting on this move, Farrell said rental growth can largely be attributed to luxury brands jostling to take up position in what is one of the world’s top luxury retail destinations.”
By contrast, the biggest fall was realised by Myeongdong in Seoul, which dropped from sixth place to 10th.
In the global ranking, shops located on Fifth Avenue, New York between 50th and 59th Street can expect to pay an average annual rent of US$950 per square foot, for ground floor retail units.
“This is before service charges, local taxes and other fit-out costs,” Farrell said. “Making New York, once again, the most expensive retail location in the world.”
Around the world, rents have increased in two-thirds of locations monitored, with falls in only around 10%, with the remaining showing stability.
“The world economy is expected to grow by around 5% this year,” explained Farrell. “Healthy economic growth rates bring confidence to retailers to expand and shoppers to spend.”
Looking ahead, Farrell warns the inflationary effect of rising oil prices will put further upward pressure on interest rates.
“This may impact countries where debt is running at high levels, as shoppers will not have so much money in their pockets to spend,” he added.
“Saying that, the outlook is still more optimistic than a year ago; the number of retailers looking for a unit in the world’s super league of shopping streets shows no signs of abating, while retailers continue to flow into emerging markets in Europe and Asia.”
http://www.propertyreview.com.au/archives/2004/03102004/headline/03102004001.html
Sydney’s famed Pitt Street retail precinct has slipped in world rankings.
Strong rental growth in a number of European economies including some emerging markets have largely attributed to Sydney’s high profile Pitt Street Mall shopping strip dropping from 5th place to 8th place in the annual Main Streets Across the World survey of global retail rents conducted by Laing+Simmons Commercial’s worldwide affiliate, Cushman & Wakefield Healey & Baker.
Main Streets Across the World 2004 tracks retail rents in the world’s top 229 shopping locations across 45 countries around the world. The report’s global league table is drawn up by taking the most expensive location in each of the countries monitored.
It is the first time in four years that Pitt Street Mall has not been in the top five retails locations in the world.
Even though rental rates have remained stable in the Pitt Street at around $5,000 per sqm/annum over the last 12 months to June 2004, today’s results see Pitt Street Mall coming in behind Dublin, Munich and Moscow.
Commenting on the movement of these locations, L+S Commercial chief executive Robert Farrell said emerging European markets have seen substantial increases in global interest in their markets which had reflected in similarly substantial increases in rental rates.
For example, Dublin’s Grafton Street shopping strip has leaped from $3,968 to $ 5,730 in just the last 12 months to June 2004.
“Nevertheless, Sydney still ranks high in Asia, coming in at second place behind Hong Kong’s Causeway Bay which has seen an increase in rentals of 54% in local currency terms, over the last 12 months, as a relaxation in visa requirements for tourists from mainland China has benefited the retail sector.”
Farrell believes that Westfield’s greater hold on the Pitt Street Mall will have a positive impact on the strip.
“Until now, there has been no coordinated or structured effort in developing an effective overall tenancy mix across the major shopping arcades off Pitt Street Mall including Glasshouse, Centrepoint, The Strand Arcade, Mid City Centre and the Myer complex, amongst others.
“Unlike the large-scale approach taken in major regional shopping centres, each of the individual shopping areas in Pitt Street have historically only been concerned with their own tenancy mix,” he said.
“With Westfield taking control over some 40% of Pitt Street Mall, I think we will see the rules of regional centres applied, resulting in improved turnover and profits for tenants and subsequently greater rentals,” he added.
”Most countries in the Asia Pacific region have experienced solid economic recovery over the past 12 months which is being driven by China and assisted by the wider global recovery. As a result, many international retailers have reacted quickly to expand their presence in places like Hong Kong, Japan and Singapore. Rentals in these cities have resulted in significant increases since mid last year,” Farrell.
Tokyo’s main high street, Ginza, is in third place on the Asia Pacific ladder and is the fast climber is the Asia stakes moving up six places from 2003 to be ranked 9th.
Commenting on this move, Farrell said rental growth can largely be attributed to luxury brands jostling to take up position in what is one of the world’s top luxury retail destinations.”
By contrast, the biggest fall was realised by Myeongdong in Seoul, which dropped from sixth place to 10th.
In the global ranking, shops located on Fifth Avenue, New York between 50th and 59th Street can expect to pay an average annual rent of US$950 per square foot, for ground floor retail units.
“This is before service charges, local taxes and other fit-out costs,” Farrell said. “Making New York, once again, the most expensive retail location in the world.”
Around the world, rents have increased in two-thirds of locations monitored, with falls in only around 10%, with the remaining showing stability.
“The world economy is expected to grow by around 5% this year,” explained Farrell. “Healthy economic growth rates bring confidence to retailers to expand and shoppers to spend.”
Looking ahead, Farrell warns the inflationary effect of rising oil prices will put further upward pressure on interest rates.
“This may impact countries where debt is running at high levels, as shoppers will not have so much money in their pockets to spend,” he added.
“Saying that, the outlook is still more optimistic than a year ago; the number of retailers looking for a unit in the world’s super league of shopping streets shows no signs of abating, while retailers continue to flow into emerging markets in Europe and Asia.”
http://www.propertyreview.com.au/archives/2004/03102004/headline/03102004001.html