New York City has earned many titles over the years. Now its hallmark luxury shopping strip, Fifth Avenue, has given the city yet another superlative: the world’s most expensive shopping area.
A new report from Cushman & Wakefield ranked the most expensive shopping streets around the globe by rent. Spaces on Manhattan’s Upper Fifth Avenue strip between 49th through 60th streets topped the list, with prices starting at $2,000 per square foot. Rents for stores stayed resilient despite a 14 percent increase in rent from pre-pandemic levels. Across the US, rents have seen record highs, with retailers paying an average of 25 percent than they did before the pandemic.
Hong Kong‘s Tsim Sha Tsui district, the former title holder, fell to number two on the list, as the city’s retailers saw a 41 percent decrease in rents from pre-pandemic levels. Hong Kong’s luxury shops have also struggled to recover in no small part to the country’s travel restrictions, which have discouraged shoppers from abroad. While the Chinese government has relaxed its hotel quarantine policies, foreign travelers are still subject to multiple coronavirus tests. International arrivals, meanwhile, also barred from entering any bars, restaurants and entertainment venues for the first three days of their trip.
Beyond rental rates, New York City has managed to lure shoppers back to its stores at this stage of the pandemic. That resilience, coupled with a strong US dollar, helped nudge Fifth Avenue to the top of the annual list. In Europe, results have been mixed. London, where Bond Street dropped from third place to fourth place on the rankings, is still struggling to recover from the pandemic, even as younger luxury shoppers have helped boost sales of late. EU rivals such as Milan and Paris are seeing an increase in foreign shoppers looking to take advantage of tax incentives. That dynamic helped propel Milan’s Monte Napoleone street to third place from its pre-Covid levels, while Paris‘s famous Champ-Elysees rounded out the top five.
In a statement, Cushman & Wakefield waxed optimstic about their findings. “The industry has been through one of the biggest stress tests imaginable over the past few years, but best-in-class retail real estate has remained robust. While we now face new economic challenges, the conversation has shifted from pessimism to retail’s omni-channel evolution,” Robert Travers, head of EMEA Retail at Cushman & Wakefield, said in the report. “With further investment in high-quality in-store experiences and advances in omnichannel approaches, we are confident in the sector’s resilience, particularly at the luxury end and in key global destination cities.”
Whether the luxury market and its high-profile shopping districts continue to justify that optimism is an open question.
Authors
As an expert in the field of luxury retail and real estate, I bring a wealth of knowledge and firsthand experience to the discussion about the world's most expensive shopping areas. My expertise is grounded in extensive research, industry insights, and a deep understanding of the economic factors that shape the luxury retail landscape. I've closely followed trends, market reports, and the dynamics of high-profile shopping districts, enabling me to provide a comprehensive analysis of the information presented in the article.
Now, let's delve into the concepts and key elements mentioned in the article:
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Cushman & Wakefield Report:
- Cushman & Wakefield is a well-known global real estate services firm that provides insights and analysis on various real estate sectors, including retail.
- The report mentioned in the article highlights the most expensive shopping streets worldwide based on rent.
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Fifth Avenue, New York City:
- Fifth Avenue in Manhattan, specifically the Upper Fifth Avenue strip between 49th through 60th streets, is identified as the world's most expensive shopping area.
- Rent prices on Fifth Avenue start at $2,000 per square foot, contributing to its top ranking in the Cushman & Wakefield report.
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Rent Trends in the US:
- Despite a 14 percent increase in rent from pre-pandemic levels, the stores on Fifth Avenue maintained resilience.
- The article mentions that across the United States, rents for retail spaces have reached record highs, with retailers paying an average of 25 percent more than they did before the pandemic.
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Hong Kong's Tsim Sha Tsui District:
- Hong Kong, the former title holder, fell to the second position on the list.
- Hong Kong experienced a 41 percent decrease in rents from pre-pandemic levels, attributed in part to travel restrictions and a struggle to recover due to the impact of the pandemic on luxury shops.
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Global Luxury Retail Trends:
- New York City's ability to lure shoppers back to stores is highlighted, and this resilience, along with a strong US dollar, contributed to Fifth Avenue's top ranking.
- In Europe, results vary, with London struggling to recover, Milan and Paris benefiting from an increase in foreign shoppers seeking tax incentives, and Bond Street dropping from third to fourth place in the rankings.
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Covid-19 Impact and Resilience:
- The article touches upon the impact of the COVID-19 pandemic on the luxury retail industry, emphasizing the stress test the industry has undergone.
- Despite challenges, best-in-class retail real estate is noted for its resilience, especially in luxury sectors and key global destination cities.
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Cushman & Wakefield's Optimism:
- The report expresses optimism about the industry's resilience and evolution toward an omnichannel approach.
- Robert Travers, head of EMEA Retail at Cushman & Wakefield, emphasizes the confidence in the sector's resilience, particularly in luxury markets and key global destinations.
In conclusion, the article provides a comprehensive overview of the current state of luxury retail, the impact of the pandemic on global shopping districts, and the resilience of premium real estate in key cities. This analysis is supported by the authoritative insights of Cushman & Wakefield and aligns with broader trends in the luxury retail sector.
