More than half of the world's most prestigious shopping streets have been affected by the global economic downturn with 54% of the 274 streets monitored by real estate adviser Cushman & Wakefield, seeing their prime rents fall.
The findings in the annual 'Main Streets Across the World' report are the biggest global fall in retail rents in its 24 year history. In only 18% of locations did prime rents rise.
'Main Streets Across the World' provides a global barometer of the strength of the retail sector and the popularity of shopping streets in 60 countries. Most of the 10 most expensive streets in the world have seen their prime rents fall or remain static as retailers have reined in expansion. New York's Fifth Avenue remains the world's most expensive street where retailers can expect to pay US $1,700/ft²/year, a decline of 8.1% on 2008. Fifth Avenue has been the world's most expensive street for the last eight years. Hong Kong's Causeway Bay and Paris's Avenue des Champs-Élysées maintain their positions at second and third respectively.
Germany's Kaufingerstrasse in Munich was the biggest riser into the top 10 moving to ninth from 12th with a 7.1% increase in rents. Ireland's Grafton Street in Dublin was the biggest faller in the top ten moving from fifth to eighth with prime rents falling 22.5%. Last year it entered the top five for the first time.
Globally, the biggest increase in rents was in Sao Paulo, Brazil, with rents at Alameda Lorena and Iguatemi Shopping rising 111% and 79.3% respectively. In Asia Pacific, Ho Chi Minh City's CBD, Vietnam had the biggest increase at 50% while in Europe, Rue St Catherine in Bordeaux, France had the biggest increase at 17.6%.
Globally, the biggest fall in rents was in Mumbai with Colaba Causeway falling 63.5%. In the Americas, Rio de Janeiro's Sao Conrado Fashion Mall fell 53.4% whilst in Europe, Bucharest's Calea Victoriei fell 48.1%.
John Strachan, Global Head of Retail, Cushman & Wakefield, said: "The last 12 months have been one of the most difficult periods ever for the retail sector with consumer spending and retail sales down in many markets. In the previous 12 month period global retail markets appeared to be fairly resilient but more recently the impact has been much more significant as the full impact of the downturn has been realized. The good news, however, is that the worst is almost certainly now behind us. Economic recovery in many major markets is now underway with key driver economies such as Germany now officially out of recession. There will undoubtedly be some markets which will continue to be affected over the next year but we expect to see a greater number move back into positive territory."
New York's Fifth Avenue is once again the world's most expensive shopping street where retailers can expect to pay US $1,700/ft²/year
Gene Spiegelman, Executive Vice President, Cushman & Wakefield New York, said: "Fifth Avenue continues to provide global retail brands with the premier opportunity to communicate their message to the broadest possible international audience. Limited supply of prime positions combined with continued demand has minimized the downward pressure on Fifth Avenue rental values. Fifth Avenue's resiliency also rests in its unique appeal to both luxury and specialty retail brands and their ability to successfully co-exist on the world's most expressive retail corridor. Notwithstanding the significant impact the downturn in the global economy has had upon the retail sector, the Manhattan marketplace and specifically Fifth Avenue have faired well as compared to the overall retail marketplace."
Munich's Kaufingerstrasse was the biggest riser into the top ten global ranking moving to ninth from 12th with a 7.1% increase in rents.
Inga Schwarz, Head of Research, Cushman & Wakefield Germany, said: "Germany is one of the largest and most stable retail markets in Europe, which is why national and international retailers have always kept its largest cities on their agenda. Although the economy has been hit hard b