Colliers International Reports Record Rents For World's Premier Retail Spaces
Global Economy Still Slowing Overall Industry Momentum
SEATTLE, July 10, 2012 /PRNewswire/ -- The most desirable global retail properties continue to show explosive year-over-year rental-rate growth despite continued economic uncertainty, according to a report just published by Colliers International's Retail Services Group. Colliers' Summer 2012 Global Retail Highlights report looks closely at global industry trends and retail market performance indicators.
Key takeaways from Colliers' 2012 survey include:
- Higher year-over-year rents: Colliers' found that of 129 prime locations surveyed, 51 posted higher year-over-year average rental rates, 49 were flat, and 24 were down (five lacked comparable data).
- Steep competition for prime locations: New York's Fifth Avenue retained Colliers' top spot as the world's priciest retail corridor, as defined by the survey. The Top 10 also included Madison Avenue, three streets/districts in Hong Kong, as well the top retail spots London, Paris, Zurich, Milan, and Sydney.
- Explosive growth among Top 10: Average rents in four of the ten retail districts grew by more than 30 percent year-over-year in local currency units. Retailers entering new markets — both developed and developing — are increasingly choosing to hedge their risk by targeting the same one or two premier locations, generating heated competition and outsized rental rate growth.
- Global slowdown: Top retail corridors with strong fundamentals remained generally resilient, but the current weakening consumer sentiment among affluent shoppers has already begun to impact retailers' revenues and suggests flattening growth rates for the coming year.
In the report, Ann Natunewicz, National Manager of Retail Research for Colliers International's Retail Services Group and principal author of the report, explains: "At a regional level, streets in areas that entered 2007-08 better-positioned economically —Australia, Canada, parts of Eastern Europe — had a higher percentage of flat-to-higher rents than those slower to emerge from the recession. We will be watching these areas closely: even as they represent some of the most attractive destinations for expansion-minded companies and yield-seeking investors, they too are vulnerable to softening consumer demand and, for those with reliable data, encroachment of e-commerce."
Lack of sufficient, high-quality retail sites in the most sought-after retail corridors is a pervasive issue worldwide. "Looking ahead, some of the trends we're seeing suggest the need for developers to unearth obsolete and existing inventory for renovation and revitalization in the coming years," said Natunewicz. "On several high streets, we're seeing the demand for retail space exceed the supply, especially in China and in Europe, Middle East and Africa (EMEA)."
The report's findings are based on the results of Colliers annual Global High Street Rents survey (April 2012) and content from Colliers' brokerage and research teams worldwide who contribute market operational metrics, nuanced commentary on retail conditions, and forward-looking opinions on what the next year will hold for consumers, retailers, landlords, and investors.
About Colliers International
Colliers International is the third-largest commercial real estate services company in the world, with over 12,300 professionals operating out of more than 522 offices in 62 countries. A subsidiary of FirstService Corporation (NASDAQ: FSRV; TSX: FSV and FSV.PR.U), it focuses on accelerating success for its clients by seamlessly providing a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and research. Commercial Property Executive and Multi-Housing News magazines ranked Colliers International the top U.S. real estate company. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world.
SOURCE Colliers International
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