Prime retail rents in the world’s leading shopping destinations stabilised in the majority of markets, and grew in a number of major cities, in the first quarter of 2010, according to the latest CB Richard Ellis (CBRE) Global MarketView report on the retail sector.
As the global economic recovery begins to gather momentum, consumer and retailer confidence have started to improve.
While this has still not translated into retail sales growth in most markets, demand for prime retail space remains healthy and vacancy in the best locations is low. As a result, there are some markets globally where prime rents are rising, and many more where the rate of decline has slowed or rents are now stable.
The Asia region is helping to lead the recovery, with retail markets generally strengthening in the first quarter of 2010. Few markets are now seeing any significant rental declines, with the majority either stabilising or posting modest growth.
Thus far, Asia is the only region of the world where economic growth is starting to feed through into retail sales increases, and this is now starting to impact on real estate markets.
With the exception of Japan, retail leasing activity in major Asian cities continued to pick up and a number of international retailers are looking to expand their footprint across the region, particularly in Hong Kong, Beijing and Shanghai. However, the threat of a supply imbalance remains a significant risk in certain cities in mainland China, Singapore and India, which are all expecting large amounts of shopping centre construction to be delivered in the next nine months.
New York City remains the world’s most expensive retail destination, with prime rents at USD1,725 per sq. ft per annum. Sydney remains in second place globally (USD1,155/sq. ft/annum), with Hong Kong ranked third (USD974/sq. ft/annum).
To download CBRE’s full report, click on the PDF attachment HERE.