Hong Kong's Causeway Bay retail strip remains the most expensive retail precinct in terms of rental value globally, despite escalating anti-government protests that have gripped the Chinese-ruled city for nearly six months.
According to Cushman & Wakefield's annual Main Streets Across the World report, which tracks rents for 448 locations across 68 markets, found that the shopping strip regained top spot despite Hong Kong's economy shrinking by 3.2 per cent from the previous quarter.
Hong Kong, one of the world's top luxury destinations, has long drawn high-end brands attracted by the flow of visitors from mainland China seeking tax-free consumer goods.
Chinese shoppers, which make up about 80 per cent of the city's overall tourists, declined by 35 per cent over the month of September.
Retail sales, which have fallen for eight consecutive months as violence continue to deter tourists and reduce local consumption, fell a further 18.3 per cent ($5.6 billion) over September compared to a year earlier.
Despite this, retail rents in Hong Kong have remained resilient in the face of the mounting pressures—although the outlook is more uncertain.
|Rank||Location||City||Rent Q 2019 $AU/sf/year|
|1||Causeway Bay||Hong Kong||$4,041|
|2||Upper Fifth Avenue||New York||$3,312|
|3||New Bond Street||London||$2,523|
|4||Avenue de Champs Elysees||Paris||$2,176|
|7||Pitt Street Mall||Sydney||$1,584|
According to the report, the Asia Pacific region is in a relatively strong position, with rents in over 80 per cent of locations covered either rising or stable.
Five of the top 10 global streets were in Europe, with four in Asia and just one in the US.
Despite rents in some parts of the Australian market softening, most notably in CBD strip retail areas, rents in higher footfall locations such as Pitt Street and Bourke Street have held firm.
Retail rents for Pitt Street Mall, which regained seventh place, grew more than any other top 10 ranked global retail location lifting by 17.9 per cent over the year.
The central Sydney shopping strips growth has been driven by demand from retailers for flagship stores and growing store footprints among major cosmetics and luxury brands.
Thanks in part to the approaching Olympic Games and the recently completed Rugby World Cup, Ginza in Japan has also been on the rise with rents at the surrounding streets lifting as well.
“The tenant’s needs being not that strong, the inbound demand that has been boasting prosperity is also changing,” Cushman & Wakefield head of retail services Japan Isao Suga said
“The demand is not expected to become a downtrend soon after the Olympics, it is important to keep examining it carefully.”
The Rugby World Cup contributed to inbound tourists to Japan increasing by 5.2 per cent in September compared to the year before, with 400,000 international visitors adding $6 billion to the Japanese economy.