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New York’s Upper 5th Avenue remains world’s most expensive retail street

Pařížská Street_Prague
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Prague, November 16, 2016 – New York’s Upper 5th Avenue remains the world’s most expensive retail street, narrowly ahead of Hong Kong’s Causeway Bay, but rental values have decreased in both as brands balance the demands of physical and online presences, according to Cushman & Wakefield. On the ladder of 71 most expensive streets, Czech Republic’s Na Příkopě Street moves up from 25th position last year to 23rd position this year. 

Upper 5th Avenue, which saw its first decrease in annual rents per square foot since the financial crisis, and Causeway Bay are both more than twice as expensive as the leading street in any other country. 

The annual Main Streets Across the World report tracks 462 of the top retail streets around the globe, ranking them by their prime rental value utilising Cushman & Wakefield’s proprietary data. Now in its 28th edition, the report also includes a ranking of the 71 most expensive streets – the top one per country. This year’s report showed that 36% of all streets analysed saw rental gains. 

“Main high streets in the Czech Republic have continued to see high demand from mass and luxury retailers. We can expect the rental value in the Czech Republic to continue growing in the future. The strong demand for commercial space in the city centre among retailers is illustrated by the arrival of more than 14 brands in the last 12 months. Those brands include Hamleys, Rolls Royce, Longchamp, COS, Pinko, Tory Burch, Marc O’Polo, Forever 21, Pupa, French Connection, MAX&Co and Tous,” says Jan Kotrbáček, Partner and Head of Retail CE at Cushman & Wakefield. 

Na Příkopě Street in Prague, traditionally attracted mass market retailers, but the whole development of the street (new projects, environment, newcomers etc) has seen higher demand here from premium brands than mass market retailers. The annual rental is at EUR 2,400 per sq m. 

“Wenceslas Square, a historical retail area, is becoming a sought-after destination for mass market retailers. The premium retail stock in the area will grow in the future thanks to the Savarin project, which will connect Wenceslas Square with Na Příkopě and Jindřišská Streets. The planned size of retail space within the project is approximately 35,000 sq m,” Mr Kotrbáček says. 

“Wenceslas Square will undergo revitalisation in the years to come. The improved and more attractive environment will likely cause rental rates to grow as the case was in the vicinity of Narodni Trida. Quadrio, the project that became the catalyst of transformation in that area, is connected directly to the Narodni Trida metro station vestibule and to MY department store. Thanks to the revitalisation and the increased customer concentration in the area, rents for retail space in the neighbourhood of the Quadrio have grown by up to 100%,” Mr Kotrbáček adds. 

Pařížská street in Prague, home to the majority of luxury brands, saw 5.4% rental growth in the year to June. Price rises to EUR 2,340 per sq m. With demand improving from this segment of the market, the traditional boundaries are expected to spread further to Siroka Street. 

“We are also seeing the expansion of the high street area from Náměstí Republiky towards Florenc via the V Celnici Street and Masarykovo Station. Penta’s development project in the area will strongly influence the growth of this location,” says Jan Voslář, Associate and Head of High Street at Cushman & Wakefield. 

Outside Prague, the most important high street locations are in the centre of Brno (Masarykova and Česká Streets and Náměstí Svobody), offering more than 40,000 sq m of modern space. Brands such as Swarovski, Nespresso, Starbucks and others have recently opened their stores there. 

In EMEA region Paris’ Avenue de Champs Élysées retained its crown as the most expensive retail location. Second most expensive street in EMEA - London’s New Bond Street saw rents rise by 14.3% over the last 12 months. Third position in the EMEA ranking is hold by Milan’s Via Montenapoleone, which recorded 20% growth over the year to June. 

“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,” says Justin Taylor, Cushman & Wakefield’s, Head of Retail, EMEA. “Retailers are facing technological advances head on, with more and more brands opting to offer online sales alongside, not instead of, a physical presence,” adds Justin Taylor.