ST : New York City still most expensive retail location

May 26, 2010

New York City still most expensive retail location

By Lee Yen Nee

NEW York City is still the world's most expensive retail location, with prime rentals almost four times that of Singapore.

According to the latest CB Richard Ellis (CBRE) Global MarketView report on the retail sector, the Big Apple was tops in terms of cost in the first quarter of this year. It was followed by Sydney, Hong Kong, London and Paris.

Prime rents in New York City, which were the highest the last time the report was compiled in the fourth quarter of last year, cost a typical retailer US$1,725 (S$2,430) per sq ft (psf) per annum at the end of the first quarter this year.

Those in Sydney and Hong Kong were US$1,155 and US$974 psf per annum respectively.

London prime rents came in at US$861 psf per annum, and Paris' were US$791 psf per annum.

In Singapore - ranked 17th in the report, up from 18th place - super prime rents stood at US$436 psf per annum, from US$444 psf per annum at the end of last year.

CBRE director of retail services Letty Lee said that while Singapore is able to attract well-known brands due to an abundant choice of pipeline supply in the Orchard Road and Marina Bay areas, this has put some pressure on prime retail rents.

The CBRE report showed that across the globe, consumer and retailer confidence started to improve in the first quarter as the economic recovery gathered momentum.

CBRE noted that while this has not translated into retail sales growth in most markets, demand for prime retail space remains buoyant and there is a low level of vacancies in the best locations.

This has fuelled prime rent rises in some markets and, in many more, the rate of rent decline has slowed or is stable.

CBRE global chief economist Ray Torto said strong demand from retailers is leading to an imbalance of supply and demand in some markets.

'Retailers still face uncertain trading conditions and continue to put pressure on landlords to offer incentive packages. However, market pressures have not stopped retailers from expanding and demand for prime retail space remains strong in many markets across the world,' he added.


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Prime rents

· 1 New York City: US$1,725(S$2,430) psf per annum

· 2 Sydney: US$1,155 psf per annum

· 3 Hong Kong: US$974 psf per annum

· 4 London: US$861 psf per annum

· 5 Paris: US$791 psf per annum

· 17 Singapore: US$436 psf per annum


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DEMAND STILL STRONG

'Market pressures have not stopped retailers from expanding and demand for prime retail space remains strong in many markets across the world.'

CBRE global chief economist Ray Torto