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Old February 6th, 2006, 06:54 PM   #1
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Vancouver's Retail Rates Among World's Top Five

Vancouver's Retail Rates Among World's Top Five
At $135 US per square foot, Vancouver retail space is the fifth-most expensive in the world -- and Robson's even worse

Derrick Penner, Vancouver Sun
Published: Monday, February 06, 2006

Move over Melbourne, step aside Midtown Manhattan, Vancouver has you beat when it comes to the prices chi-chi retailers have to pay to play in top retail sales locations, according to the commercial realtor NAI Global.

Vancouver, while it can't top the highest rents on New York's 57th Street, still ranked fifth in the world for expensive retail real estate with a $135 US-per-square-foot lease rate for top locations, including its renowned Robson Street.

Hong Kong ranks No. 1 in NAI Global's top 10 list with a $696 US-per-square-foot lease rate, Tokyo was second, charging an average rent of $209 US per square foot and Beijing was third with a lease rate of $183.

New York's Midtown Manhattan was the only United States location to crack NAI Global's top 10, and it ranked ninth with an average lease rate of $86.

Greg McPhie, director of NAI Goddard & Smith, NAI Global's Vancouver-based affiliate, compiled the data for Vancouver. He said it was an average of "high-street" fashion rates for Robson Street, where the highest rents are approaching $200 Cdn per square foot.

"I guess it speaks to our attractiveness as a city and all the dynamics that make our downtown exciting and attractive," McPhie said. "Vancouver, as a city, has done very well at developing, and is well known for that."

So high-profile fashion chains can justify paying high rents on Robson Street for the profile that it gives them, and McPhie guessed that some of the justification comes from the advertising value of just being there.

Robson is home to stores such as A/X Armani Exchange, Original Levi's, Club Monaco, Banana Republic, the Gap and Bebe. Cosmetics company Kiehl's has a location there, as does Pegabo Shoes and local fashion icon Aritzia.

"Some of those retailers have to be there," McPhie said. "They seem to want to be there for the tourists and the profile it gives them. They rationalize those rates, and rationalization goes on, because they're paying much lower [rents] in other parts of the city."

Boy's Co. is another local, three-store chain with a location on Robson. Boy's Co. president David Goldman said the company opened the Robson location in 1987, and said staying there is worth it despite ever-rising rents.

"The exposure alone is worth I don't know how many times its value in advertising simply because you get the numbers of people walking past your door," Goldman said.

Goldman added that all the major retailers who want to be in Vancouver want to be on Robson. He said these days "there's more wants-to-be" than there is space available in choice locations.

Shaadi Faris, a senior analyst for Colliers International, said it sounds a bit surprising to see Vancouver ranked so high on NAI Global's list, until he stops to think about recent developments.

Colliers' 2005 retail survey shows that Robson's top rents of $200 per square foot still do not approach the top rents on New York's 57th Street, where stores paid $950 US per square foot, or even Geary Street in San Francisco, where the highest lease rates topped $450 US.

However, Faris said Vancouver is becoming internationally recognized as a shopping destination, and "the big-name guys" are willing to pay high rents, even if they lose money, "just to be on Robson."

Kari Baker, a retail consultant with Sixth Line Solutions in Vancouver, said very few stores, especially the big brands, would lose money on Robson. She said those stores tend to have their sales formula "down to a science."

Robson, she added, has a reputation for carrying the same amount of pedestrian traffic as some prime New York spots.

Edward Finn, NAI Global's senior vice-president, said Vancouver's improving economy, the strengthening of the Canadian dollar and the impending 2010 Olympics all increase Vancouver's desirability as a retail destination, and "has pushed Vancouver to [become] one of the leading retail cities in terms of the price of exclusive retail space."

depenner@png.canwest.com

THERE'S GOLD IN VANCOUVER'S STORES:

The city has become enough of a retail destination to earn a fifth-place ranking on commercial realtor NAI Global's top-10 list of the world's most expensive places to rent a retail store.

1. Hong Kong -- $696

2. Tokyo -- $209

3. Beijing -- $183

4. Seoul -- $161

5. Vancouver -- $135

6. Shanghai -- $134

7. Taipei -- $131

8. Jakarta -- $114

9. New York City, Midtown -- $86

10. Melbourne -- $81

Source: NAI Global, commercial realtors
© The Vancouver Sun 2006
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Old February 6th, 2006, 07:54 PM   #2
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"However, Faris said Vancouver is becoming internationally recognized as a shopping destination, and "the big-name guys" are willing to pay high rents, even if they lose money, "just to be on Robson."" It's true. For example, I've heard one of those Starbucks on Robson pays in excess of 40 grand per month. So those places don't make a profit obviously. It's all about the advertising or what it does for the chain as a whole. I see now why every new store seems to be linked to some chain. So many Rogers and Starbucks...
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Old February 6th, 2006, 08:14 PM   #3
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Im a bit confused. It said rents in SF are higher, as well as 57th in NY

top rents on New York's 57th Street, where stores paid $950 US per square foot, or even Geary Street in San Francisco, where the highest lease rates topped $450 US.


Yet the highest on their list is Hong Kong at $696 US per square foot.

Am I missing something? Clearly 57th has higher rents.

Also, im suprised rents arent higher in places such as the Third Street Promenade in Santa Monica, or Rodeo Drive in Beverly Hills. Both have far superior shopping and profile.

I would like to see an Urban Outfitters, Abercrombie, or D&G come to Robson.
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Old February 6th, 2006, 08:33 PM   #4
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Quote:
Originally Posted by Westcoast604
Im a bit confused. It said rents in SF are higher, as well as 57th in NY

top rents on New York's 57th Street, where stores paid $950 US per square foot, or even Geary Street in San Francisco, where the highest lease rates topped $450 US.


Yet the highest on their list is Hong Kong at $696 US per square foot.

Am I missing something? Clearly 57th has higher rents.
The NAI Global ranking is based on the average rental rates of the city's hottest shopping spots pooled together (areas included into the survey are unfortuantely not mentioned in the article).

The SF rates are based on Collier's own studies.
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Old February 6th, 2006, 09:07 PM   #5
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But at $900+ per sq.ft for some of the most expensive rates in New York, you would think the average would be work out to be higher than Vancouver's $135 per sq.ft average, with the highest rents only topping $200 per sq.ft.
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Old February 6th, 2006, 11:10 PM   #6
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Quote:
Originally Posted by Westcoast604
But at $900+ per sq.ft for some of the most expensive rates in New York, you would think the average would be work out to be higher than Vancouver's $135 per sq.ft average, with the highest rents only topping $200 per sq.ft.
True. I guess in the end it just depends on how NAI defined the area that is "Midtown" Manhattan. I'm pretty sure that that Vancouver's stats only includes downtown (& possibly Broadway), and excludes the DTES, so in essense it might be skewed higher than what it's supposed to be.

Forgot to mention before that the $900/sq.ft. stat comes from Collier's own studies.
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Old February 7th, 2006, 07:53 PM   #7
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I think that the comparison is flawed. It looks like they've taken the most expensive shopping in Vancouver (Robson) and compared it with an overall Manhattan average. The comparison should have been for the most expensive streets in Manhattan, SF, etc. OR an overall average in Vancouver. Yaletown rents (under $50/sqft?) are no where near Robson street rents and there's just as much space there as on Robson. That would have been enough to dilute the "downtown" lease rates.
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Old February 7th, 2006, 10:14 PM   #8
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Well either way it shows that Vancouver is growing into a very worldly city.
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Old February 7th, 2006, 10:29 PM   #9
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^Woo, with a Gap and a Levi's! Seriously, it's amazing it's more expensive then Yorkville or Sherbrooke.
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Old February 7th, 2006, 11:32 PM   #10
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"I think that the comparison is flawed. It looks like they've taken the most expensive shopping in Vancouver (Robson) and compared it with an overall Manhattan average."


Of course it's flawed....it's that wonky "WesternCanadian Math" they use to try and make themselves seem "world class".

What I can't figure out, is why anyone would purposely fudge figures to make it "look" like Vancouver had such high rents. Vancouver is really very stunted in the retail department relatively speaking...so to WAAAAY overpay for it is just plain stupid....not a reflection of retail prowess or what if offers.

Robson is Vancouver's only "swanky" few blocks...and it is not even worth mentioning when talking about the great High Streets of the world....and I've never seen any "comparisons" outside of this one that has ever indicated it.






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Old February 8th, 2006, 12:45 AM   #11
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Don't want to upset anyone here. But shopping in Vanoucver is the most boring experience when compared to Toronto, Montreal and Quebec City. I can think of many International shopping scenes at St Petersburg, Budapest, Las Vegas ... just to name a few. Hard to imagine tourists would get overly excited over a Prada handbag at Robson Street.
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Old February 8th, 2006, 07:32 AM   #12
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Quote:
Originally Posted by helsnkiborg
Don't want to upset anyone here. But shopping in Vanoucver is the most boring experience when compared to Toronto, Montreal and Quebec City. I can think of many International shopping scenes at St Petersburg, Budapest, Las Vegas ... just to name a few. Hard to imagine tourists would get overly excited over a Prada handbag at Robson Street.
/\ Well, obviously they do. Otherwise, the retailers wouldnt justify the rents.
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Old February 8th, 2006, 04:54 PM   #13
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Quote:
Originally Posted by helsnkiborg
Don't want to upset anyone here. But shopping in Vanoucver is the most boring experience when compared to Toronto, Montreal and Quebec City. I can think of many International shopping scenes at St Petersburg, Budapest, Las Vegas ... just to name a few. Hard to imagine tourists would get overly excited over a Prada handbag at Robson Street.
I don't have any arguments, but I think shopping in general is boring, that's just me. I would think if the demand for more shopping grows, then there will be insentive to setup more shopping areas. I think that's how it works.
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Old February 9th, 2006, 06:35 PM   #14
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Hate to harsh Vancity's buzz here, but doesn't Robson st. still have a Hooters on it?

I think your city is in trouble when there is better shopping in the airport.
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Old February 9th, 2006, 07:34 PM   #15
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What is good shopping???
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Old February 10th, 2006, 12:52 AM   #16
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Well, to most Canadians that would be inexpensive shopping - read discount chains (Winners) and big box stores.

To others, it's having high end stores that only the really wealthy can afford at regular prices.

Anyways, Robson is very much main stream shopping - basically the same stores you'd see in a mall, but on the street (which makes the high rents more surprising).
i.e. Club Monaco, Banana Republic, Gap, Roots, The Source and Aritzia (and probably abunch of shoe stores) each have stores on high rent Robson as well as in Pacific Centre.

The higher end stores in Vancouver are clustered near the Cruise Ship Terminal at Canada Place (Sinclair Centre and West Hastings) in the newly christened "Heritage District". There are also a few "off-Robson" at Alberni and Burrard.
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Old February 10th, 2006, 04:41 AM   #17
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^ Yeah exactly, the high end stores aren't on Robson at all.

Chanel - Howe St
Gucci - Georgia St
Louis Vuitton - Burrard St
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Old February 10th, 2006, 10:24 AM   #18
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The so-called "chi-chi" Robson street is like two frigging blocks....what a joke. And you're right, it's just mall stores. Downtown Vancouver shopping is so small and mediocre, I have no clue as to where this hype comes from....Vancouver #5 in the world???? Yea right. It can't even begin to compete with Bloor-Yorkville, let alone the top-tier shopping avenues of the world.






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Old February 10th, 2006, 12:10 PM   #19
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^ bitterness i guess. I understand though, Toronto wasn't even mentioned in the list.
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Old February 10th, 2006, 01:21 PM   #20
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"Toronto wasn't even mentioned in the list."


Right...cause poor little TO could NEVER compete with Vancouver in terms of retail. Who are you kidding?

And neither was Vancouver on any "list" really....cause the "list" is BS (at least as far as Vancouver's concerned).


Read this part....

"Greg McPhie, director of NAI Goddard & Smith, NAI Global's Vancouver-based affiliate, compiled the data for Vancouver. He said it was an average of "high-street" fashion rates for Robson Street, where the highest rents are approaching $200 Cdn per square foot."


As you can see, this is some Vancouver marketing dip who figured he would cherry-pick a few high rents on a two block stretch of Robson ( a small handful of small retail stores), and pretend it's a reflection of retail rates in Vancouver....and then try comparing it to the averages for much bigger areas around the world.

But I guess it's important enough for Vancouverites to pretend they are such heavy hitters, even if it means they have to resort to dishonest reporting to do it. I try liking Vancouver and it's inhabitants, but you guys keep coming up with this kind of crap often enough to make me just want to laugh you outa the room.






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