New Bond Street has lost it rating a the top retail destination in Europe, losing out to the Champs Elysees in the Cushman & Wakefield Main Streets Across the World 2011 report.
Prime retail rents increased in just under two-thirds of the 63 countries surveyed in the report, with Asia Pacific and Latin America regions lead global growth in retail markets.
New York’s Fifth Avenue, where rents jumped by 21.6%, retained its top spot as the most expensive shopping street in the world for the tenth year running.
Causeway Bay in Hong King remained in second place, and Tokyo’s Ginza in third.
New Bond Street saw rental increase of 4.3% to $930 per sq ft a year, but still dropped two places in the rankings to sixth.
The Avenue des Champs-Elysées in Paris saw a rental uplift of 5.3% and is now the most expensive retail destination in Europe, overtaking New Bond Street. Last year the famous Paris street saw a decrease of 9.5%.
Peter Mace, head of central London retail, said, “Whilst New Bond Street has dropped in the rankings, it remains one of the most sought after locations in the world for luxury brands, with demand far outstripping the supply of available accommodation.
“The last open market letting to take place in the prime section of the street was in December 2009 when 169 New Bond Street was let to Piaget on a new 15 year lease at a record rent. There is no question that rental levels have increased over the past twenty months but to date, a landlord has not been able to secure vacant possession of a prime shop in order to create new market evidence. I am sure it is only a matter of time before Bond Street re-establishes itself close to the top of the rankings.”
In Europe the growth was modest at 1.9%, and lagged only behind the Middle East and Africa, which both remained flat. However, Europe's small growth in retnal values was still an improvement on the decline of 4.3% in rents across the region last year.
Asia Pacific and Latin America are the regions leading the global growth, according to the report, with 12.2% and 10.6% respectively. Wangfujing in Beijing recorded the largest growth at 109.5%.
James Hawkey, executive director - retail services, China, said: "Retailer expansion in China continues to be rapid, with the sales of China's top 100 retailers growing at a rate of 21%. Growth in the luxury sector has been supported by strong sales. News of a potential reduction in tax on luxury goods, which would bring prices in China closer to those in Europe and America, may lead to further expansion if realised."
Cushman reports that the biggest climber in the top ten was Pitt Mall Street in Sydney, where rents grew by 33.3% on last year, following redevelopments.
However, rents fell in 19% of countries, down from 34% recording a fall last year.
John Strachan, global head of retail, said, “The recovery in the West is fragile but our offices have seen enhanced levels of business, particularly in the major city centres which are on the shopping lists of many international brands. Supply is short and both rents and prices are being forced upwards.
"Retailers continue to expand in the Middle-East and Japan, but China, India and to some extent South America remain the focus of attention for many of the world’s leading retailers.’’
Martin Mahmuti in the EMEA research team, said: “The growth in global retail markets is being supported by aggressive retailer expansion in emerging markets and fierce competition for the best and most high-profile global shopping locations amongst successful brands.
"We do not foresee international activity slowing down; occupier demand is expected to remain robust as retailers seek to enter new prime markets abroad rather than looking for compromised locations in their own back yards. This trend will be enhanced by multi-channel retailing whereby tertiary locations will be almost entirely replaced by on-line transactions over time.”
The report provides a barometer of the global retail market, tracking rents in the top 278 shopping locations across 63 countries.
Read the report in full here