THE PRICE of renting a prime spot on one of London’s best shopping streets has risen 16 per cent in the past year – but the city is only the third-priciest place in the world for retailers to set up shop.
Hong Kong has the most expensive prime retail rents, coming in at a whopping $4,328 per square foot in the first three months of the year, property services group CBRE said yesterday.
London’s most desirable shops will set retailers back an average of $1,503 per square foot, slightly more than Paris and streets ahead of the rest of Europe.
Australian cities have also seen a jump in prime retail rents, as a growing economy propelled by mining has attracted luxury brands to the country.
An inflow of US retailers helped Sydney maintain its prime rent at an average of $1,018 per square foot.
While CBRE predicts continued growth in prime rents, the firm’s global chief economist Raymond Torto added that “at the current high levels, retailers are considering ‘off’ prime or secondary locations and showing a reluctance to pay record high rates”.
The search for less exorbitant real estate has driven some retailers to spurn the record-breaking rents on Bond Street in favour of other London locations. Designer brand Oscar de la Renta last year chose to open its maiden UK store on Mount Street in Mayfair.
Soaring rent at the high end of the market contrasts with the more precarious outlook on the high street, where many landlords have been forced to cut rents as a string of retailers attempt to stave off collapse.
HMV’s administrators asked landlords in February to reduce their rent bills by as much as two thirds to help the music chain survive.
Separate figures from CBRE yesterday showed that real estate investors ploughed €2.4bn (£2.04bn) into retail sites in the first three months of the year, up nine per cent on the same quarter last year.
The statistics showed rising interest in retail properties in the UK and Germany.