Zurich’s Bahnhofstrasse has dropped two places in a ranking of the world’s most expensive retail streets, which was topped once again by New York’s Upper 5th Avenue. But rental values have decreased in both as brands balance the demands of physical and online presences.
Bahnhofstrasseexternal link, which stretches 1.5 kilometres from the station to the lake, is lined with shops selling luxury brands. The average rent of €8,408 (CHF9,030) per square metre puts it in ninth place on an annual list by US real estate brokers Cushman & Wakefield.
The 28th edition of Main Streets Across the Worldexternal link, published on Wednesday, looked at 462 of the top retail streets around the globe, ranking them by their prime rental value. The report also includes a ranking of the 71 most expensive streets – the top one per country (some cities, such as Paris, have several streets that beat Zurich).
Upper 5th Avenue (49th-60th Streets), which saw its first decrease in annual rents since the financial crisis, and Hong Kong’s Causeway Bay are both more than twice as expensive as the leading street in any other country, with square-metre rents of CHF31,230 and CHF29,970 respectively.
Paris’s Avenue des Champs Élysées is third, London’s New Bond Street is fourth with Tokyo’s Ginza climbing three places into fifth. The top ten is filled out by Milan’s Via Montenapoleone, Sydney’s Pitt Street Mall, Seoul’s Myeongdong, Bahnhofstrasse and Vienna’s Kohlmarkt.
This year’s report showed that 36% of all streets analysed saw rental gains.
Justin Taylor, Cushman & Wakefield’s head of retail for the EMEA region (Europe, Middle East and Africa), said retailers were facing technological advances head on, with more and more brands opting to offer online sales alongside, not instead of, a physical presence.
“Demand is strong for the right space in the right location and the lack of supply along the majority of Europe’s main thoroughfares is seeing rents rise further and expanding the boundaries of well-established streets,” he said.
“The larger question, for 2017 and beyond, will be the unrelenting rebalancing of sales origination – bricks and mortar versus e-commerce,” added Gene Spiegelman, head of retail services, North America.
“The urban retail sector will continue to benefit from global brands seeking tangible connections with the consumer while the pressure will build upon enclosed malls and open air shopping centres to continually enhance their shopping experience and differentiate their market positions to maintain competitiveness in the continuous advancement of the ‘bricks and clicks’ model.”
In Zurich and Geneva, occupier demand for prime retail high streets remained very strong for international luxury brands in the first quarter of 2016, according to Cushman & Wakefield’s “Retail Market Snapshot” of Switzerland for that period.
“As the availability of quality space is limited, competition for prime retail units is high and results in the relocation of existing retailers who are replaced by luxury brands willing to pay a premium in order to secure the best locations,” the authors wrote.
“Furthermore, the Swiss franc has got remarkably stronger during the past 16 months and the activity in online shopping market increased. As a result, optimisation of the brick-and-mortar store portfolio across the whole retail segments (i.e. mid-sized, large retailers) can be observed.”
swissinfo.ch and agencies