MAIN SSTREETTREETS
SA
ACRO
CROS
SS
THE W
WORLD
ORLD 2017
A Cushman & Wakefield Research Publication

INTRODUCTION

WEL
WELC
COME
to the 29th edition of Cushman & Wakefield’s global
flagship report, Main Streets Across The World. This
report tracks 451 of the top retail streets around theglobe, ranking the most expensive in each country by
their prime rental value and enabling an analysis oftrends in retail real estate performance.

Austria - BAR bareal Immobilientreuhand GmbH
Africa – Cushman & Wakefield Excellerate
Bulgaria – Cushman & Wakefield Forton
Denmark – Cushman & Wakefield RED
Estonia – DTZ Kinnisvaraekspert
Finland – Cushman & Wakefield Finland
Greece – Cushman & Wakefield Proprius
Ireland – Cushman & Wakefield Ireland
Israel – Cushman & Wakefield Inter Israel
Latvia – DTZ Kinnisvaraekspert

On the one hand, with the rapid growth in technology and new concepts,

Lithuania – DTZ Kinnisvaraekspert

the retail sector has never been more innovative or vibrant. Yet, in a

Malaysia – Cushman & Wakefield IVPS

decidedly omni-channel world where consumers are time-poor and have

Norway – Cushman & Wakefield Realkapitala huge choice as to where they spend their money, the physical store

Oman – Cluttons LLP (preferred supplier)faces an ever-increasing challenge to attract shoppers. And, with retailer

Qatar – DTZ Qatar

margins under continuous pressure, the need for accurate and timely

Rep. of Macedonia – Cushman & Wakefield Forton

information on retail property costs has never been so important.

Romania – Cushman & Wakefield Echinox
Serbia – Cushman & Wakefield Forton

The information has been provided by Cushman & Wakefield, external

Slovenia S-Invest d.o.o – (third party)

sources and the affiliate partners of Cushman & Wakefield:

Switzerland SPG – Intercity Commercial Property Consultants
Thailand – Nexus Real Estate Advisory Company Limited
Ukraine – Cushman & Wakefield UkraineMO
MOS
ST EXPENSIVELOCAOCATIONSTIONS BBYY
COUNTROUNTRYYMOMOSST EXPENSIVE LLOCAOCATIONSTIONS BBYY
COUNTROUNTRY
Y

GL
GLOB
OBAL
AL OVERVERVIEW
VIEW

GL
GLOB
OBAL
AL
TREND
TRENDSS

In some markets, the decoupling between
macro-economic trends and the retail property
market has become increasingly apparent, withthe latter being driven mainly by structuralchange on the back of the growth in online
retailing. Indeed, how can the US economy begrowing at circa 3% per annum, while retailers
are closing stores at the fastest rate on record?
Yet, amidst the headlines around the continued
growth in online sales, mall closures andretailers downsizing, rents for prime retaillocations have actually held up well. In fact,over the year to June, global retail rental
growth amounted to 0.5%, with 136 of the 451
locations monitored recording growth, while
only 90 experienced a fall in rents.

Nonetheless, with the growth of online, we
continue to see a major shift in retail andthe type of real estate retailers are taking.
While many retailers are taking fewer but
larger stores in major cities, some operators
are consolidating their store portfolios andon experience, lifestyle and spaces in which

The established and clearly defined sectors of

they can live, work and play. This has resulted

retail, offices, residential, leisure and logistics

in a drift back to city centres and areas thathave therefore become blurred. High streets

provide housing, together with retail, food &and shopping centres are no longer just about

beverage provision and other leisure such as

shopping – they need to offer much more incinemas and fitness centres.

order to create a sense of ‘place’.

“occupying smaller footprints, whichchallenges them to really hone in on what
consumers want in a more effective and

The growth in online retail has
reinforced the importance offlagship stores.

direct way. Indeed, consumers are now
demanding more personal and uniqueexperiences from every store.

However, it would be wrong to say thattechnology is the enemy of the retailer. It has
also provided retailers (and landlords) with anopportunity to drive sales by combining their
online and physical platforms to create aseamless omni-channel experience for thecustomer. If anything, the growth in online has
reinforced the importance of flagship stores.
The growth of ‘experiential’ retail is an ongoing“

The luxury sector has had a solid 12
months, while the growth in F&B
shows no sign of abating and anincreasing number of pure play etailers are opening stores.

And, as the retail landscape continues to
evolve, it is important to stress that thedemand for physical space is not dead.
As our analysis of the regions and key cities
demonstrates, trends vary widely from location
to location, but the common theme is that
global retailing remains as dynamic and as
vibrant as ever, as it responds to thetrend, along with an explosion in the concept

technological and demographic changes takingof ‘wellbeing’. Consumers are strongly focusedplace.

EUROPE OVERVERVIEW
VIEW

EUROPE IN BRIEF

While challenges and uncertainties remain, Europe’s
retail recovery has continued and a further strong
performance is anticipated for 2018. Retail sales in a
number of markets have been buoyant and, with themore stable economic and political backdrop helping
to support consumer spending, the outlook for retailproperty is generally upbeat.
Notwithstanding the ongoing polarisation between prime and secondary
locations, major high streets in the top European cities continue toexperience an excess of demand over supply, with cross border retailers
accounting for a significant proportion of leasing deals, most notably
flagship stores.
Footfall remains critical for retail success and strong population growth
and tourist numbers have been instrumental in driving growth in a
number of major cities.

UK
In the UK, the commercial backdrop remains dominated by theuncertainties of Brexit and there is a consensus that economic growth will
be weaker in 2018. Physical retail is also facing the additional challenge ofthe growth in online sales, which now account for around 16% of total
retail sales. Nonetheless, rental growth in the major cities such as
Manchester and Birmingham amounted to around 2% over the year toJune, as retail continues its gravitation towards bigger and better.
In central London meanwhile, the major thoroughfares remain some of
the most desirable and expensive streets in the world. While there was apause in activity in initial aftermath of the EU referendum, the start of2017 brought a resurgence in leasing deals – only for activity to easeagain in late 2017.

“

New Bond Street has overtaken Avenue des Champs
Élysées as the most expensive shopping street in Europe,with rental growth of almost 40%

New Bond Street, London - demand in central London has been focused on higher-end streets

Overall, central London retail continues to benefit from the fall in thevalue of sterling and the increased footfall generated by a rise in bothoverseas and domestic visitors. However, demand has been focused on
the higher-end streets such as Bond Street and Bruton Street and tends
to be building-specific. Indeed, New Bond Street has overtaken Avenue
des Champs Élysées as the most expensive shopping street in Europe,
having seen rental growth of almost 40% over the year to June.
Looking forward to 2018, the retail sector will face a number ofheadwinds, including the phasing out of transitional rate relief and theintroduction of new lease accounting measures, as well as a potentiallyvolatile currency which may impact on international visitors.

Rental growth in the regional cities of Cork, Limerick and Galway
meanwhile has been somewhat more subdued in comparison, with the

However, while top rents are largely static, pockets of growth aremajority of tenant demand coming from domestic occupiers. However,expected in secondary parts of the major streets, such as the middle

the strength of the Euro against the pound continues to drive Irish

sections of Bond Street and to the east of Oxford Circus. Availability has

consumers across the border with the North, where they can access aedged up in some areas but generally remains at a low level which will

similar retail offer albeit at lower prices.

help to underpin the market.

Ireland

Franc
FranceeFrance has five of the most expensive high streets in Europe, all of which

In Ireland, healthy demand from new entrants, including & Other Stories,

are situated in Paris. While rental growth has been limited, demand forVictoria’s Secret and Urban Decay, has helped drive rental growth on

prestigious addresses such as the Avenue des Champs Élysées, Avenue

Dublin’s Grafton Street, where rents have increased by 9.8% over the lastMontaigne and Rue Saint Honoré has remained resilient in the face of

12 months. The street remains a popular destination for mass market andpolitical uncertainty, in the lead up to the French general election. All

luxury retailers alike. Limited availability of quality retail space on boththese locations benefit from an attractive retail environment and strong

Grafton Street and Henry Street is encouraging occupiers to explore

footfall generated by domestic and overseas visitors, as international

neighbouring streets.

tourism recovered strongly during 2017.

“

France has five of the most expensive high streets in
Europe, all of which are situated in Paris.

Grafton Street, Dublin - rents have increased by 9.8% over the last 12 months

during the last twelve months, with reports of greater incentives being
offered by landlords. Despite higher inflation, the French economy isexpected to gain momentum, as improvements in employment arereflected in real wage growth. That said, occupier demand for secondary
locations has been weakening, as retailers seek to offload
underperforming stores in order to invest in their best locations.

Belgium
Improvements to Belgium’s economy have been underpinned byrecovering consumer confidence following a turbulent year in 2016. An
uptick in availability has been recorded across Belgium’s main highstreets, although prime retail rents have, for the most part, remainedChamps-Élysées, Paris - Galeries Lafayette will be arriving in 2018

stable. Avenue Louise in Brussels and Meir in Antwerp were theexceptions to this, where respective growth rates of 1.4% and 5.4% have

Traditionally the home of luxury retail, demand from mass market

been recorded over the year to June.

retailers seeking flagship stores in key tourist locations has been
increasing in recent years. Indeed, in anticipation of the arrival of Galeries

Cosmetics retailers such as NYX, Rituals and Kiko have helped to drive

Lafayette in 2018, the Avenue des Champs Élysées is still evolving, withoccupier demand on key high streets, alongside leisure retailer JD Sports.

2017 seeing a number of international brands such as Chanel, Foot Locker

The impact of e-commerce has, to-date, been relatively modest

and L’Occitane en Provence signing up to open stores in the future.

compared with neighbouring countries, although the F&B sector is

Adidas took advantage of Banana Republic’s departure to expand its

beginning to feel the strain, as delivery services such as Deliveroo gain

store in the southern part of the avenue. In the luxury sector, themomentum.

refurbishment of Place Vendôme is also reaching completion, with Louis
Vuitton opening its third Parisian flagship store in a landmark building.

Netherlands
International retailers continue to be the main driver of occupier demand

Rental growth across France as a whole has been somewhat muted

across key shopping locations in the Netherlands, following a number ofinsolvencies amongst domestic retailers in 2016. A fragile consumer

under pressure with the rise of e-commerce. A lack of affordability inbackdrop is contributing to the ongoing polarisation of prime andprime locations is beginning to benefit more secondary areas, as

secondary shopping locations, as high streets in main tourist locations

struggling retailers explore more affordable locations.

continue to outperform smaller regional cities.

In the Netherlands a fragile consumer backdrop is contributing to theongoing polarisation of prime and secondary shopping locations

Amsterdam’s core retail area is compact, with the majority of retailer
activity focused on Kalverstraat and P.C. Hoofstrat, which are popularwith international luxury and mass market retailers alike. However, theretail offer on secondary streets across Amsterdam’s historic core is morevaried in quality, with some outlets aimed specifically at the tourist
market. New legislation approved in 2017 introduced a ban on new shops
targeting tourists, in an attempt to rebalance the retail offer to suit theneeds of the local population.
Neuhauser Street, Munich - rents remain unchanged

GermanGermanyy
In Germany, stable employment and growth in real wages has created a

Germany’s occupier base has evolved and new formats in the F&B sector

strong backdrop for the retail sector. With the exception ofhave emerged, alongside convenience retailers and drugstores. Munich in

Tauentzienstrasse in Berlin, where rents have grown by 3.3% over the lastparticular continues to attract international retailers, with luxury handbag

12 months, rents on Germany’s most expensive shopping streets,

designer Coccinelle and French cosmetics brand Sephora both opening

including Kaufinger/Neuhauser in Munich, Zeil in Frankfurt andstores in the last twelve months.

Spitalerstraße in Hamburg have remained unchanged. Rents on thesestreets may have reached their peak, as retailer margins continue to comeAustria
In Austria, tourism continues to drive demand from international retailers
seeking representation in the capital Vienna. Over the last twelve months,
Fendi, Karl Lagerfeld and Tods have all opened flagship stores on
Kohlmarkt and Graben where availability remains very low. A weakdevelopment pipeline has maintained a low level of supply across Austria“

In the last year, Fendi, Karl Lagerfeld and Tods all
opened flagship stores on Kohlmarkt and Graben in
Vienna where availability remains low

as a whole. F&B operators meanwhile have benefitted from the ongoingrationalization of store portfolios amongst fashion retailers, withnumerous new restaurant concepts emerging in the major cities.

Switzerland

However, rents in the core in-town locations were unchanged in the year

Switzerland’s retail market has seen a good level of activity, althoughto June 2017. Going forward, an improved economic outlook, as well as

leasing negotiations are taking longer in many instances. Mass market

recent tax reforms, immigration and falling oil prices should boost

homeware retailers such as Zara Home and Flying Tiger, as well as

consumer spending.

cosmetics brands such as Rituals and Kiko Milano, have all been
expanding over the last twelve months. Søstrene Grene meanwhile will
open its first Swiss store on Rennweg in Zurich before the end of 2017 as
well as lingerie retailer Hunkemöller in the Mall of Switzerland.
On the downside, parts of the market have suffered on the back of the
Swiss Franc’s appreciation against the Euro, notably the border cities
such as Basel and St. Gallen, which have been losing domestic shoppers
across the border to Germany, France or Austria. This trend has been
apparent since 2015, when the Swiss National Bank (SNB) removed thelong standing cap on the Swiss Franc against the Euro. The exchange rate
has recently recovered to some extent, but the issue remains a headwind,along with the steady growth in online sales. However, luxury retailers

Graben, Vienna where availability remains very low

continue to pay a premium for stores on Zurich’s Bahnhofstrasse - one of

the most expensive high streets in Europe.

Denmark
In Denmark, the relatively small size of the Copenhagen retail market
means that options for retailers and F&B operators can be quite limited.
As a result, strong demand from a range of occupiers has led tosignificant rental growth in some of the key locations around Strøget
where supply is limited. With an increased consumer focus on experience,“

A number of online retailers have opened shops inDenmark. Miinto, an internet-based portal forindependent retailers, opened up a pop-up store in
Copenhagen to offer some of their bestselling online
brands.

many retailers are looking even more keenly for the right setting andlocation and are prepared to consider alternative solutions tocomplement their brands. For example, H&M’s ARKET opened in an oldInternet usage in Denmark is one of the highest in Europe, so retailers arepost office with a renowned heritage, while Madklubben, a local

increasingly using their online presence to drive in-store sales. In addition,

restaurant chain, opened in an old night club in the city.

a number of online operators have opened shops. Miinto, an internetbased portal for independent retailers, opened up a pop-up store in
Copenhagen to offer some of their bestselling online brands andBoozt.com, a Swedish online retailer, has opened an outlet in a
Copenhagen shopping centre and a beauty product store in Roskilde. The
growing trend of domestic and international online brands looking to
opening flagship stores in Copenhagen is expected to continue.

FinlandIn Finland meanwhile, prime rents in Helsinki edged up in the 12 months toJune on the back of a buoyant economy and high levels of consumer
confidence. Occupier demand has come from a range of sectors but F&B
operators have been particularly active. One other notable trend has been
Online retailers are opening physical stores in Copenhagenthe drive by the department stores to broaden their offer by devotingmore space to concessions and introducing new brands.

and domestic online retailers. Secondary locations in particular haveexperienced a cooling in activity. However, high street retailers remain
active, notably the F&B sector which is at the heart of plans to expand
cafés, restaurant areas and food-halls in many city centres and larger
shopping centres.
Prime rents on Biblioteksgatan in Stockholm rose by 4% over the year toJune, while rents elsewhere showed limited movement. With a recent
weakening in the residential market and a rise in the household savings
rate, a period of more modest activity may be in prospect. That said, thegovernment has proposed an expansionary budget in anticipation of the2018 elections, and this will help to support retail spending.

Norwa
Norwayy
In Norway, the retail market has been relatively stable, with limited
movement in rents in Oslo’s main retail locations. However, there is a
growing trend towards providing a more diverse and ‘experiential’
offering. Strong demand for the main high streets is continuing, with afocus on smaller units of 50-250 sq.m.

Pohjoisesplanadi, Finland

The Baltics
Improvements in consumer confidence, spurred by falling unemployment
and strong growth in wages, has helped fuel consumer spending acrossSwedenthe Baltic region. However, Estonia, Latvia and Lithuania continue to offer

In Sweden, the big story of the last year has been online versus bricks-

some of the most affordable retail locations in Europe and prime rents

and-mortar, as retailers face up to increased pressure from both foreignacross the region’s key cities have remained stable. Demand from

international retailers is focused at the discount end of the spectrum.

are underway, aimed at improving the quality of existing retail stock in

H&M has been particularly acquisitive in Riga, while Lidl has entered thethe city centre. Prague’s reliance on tourist spending means that e-

Lithuanian market, with openings planned for Estonia in coming years. E-

commerce has not yet had a significant impact on the city’s retail market.

commerce in general has been slow to gain momentum, although strong
growth in online sales was reported in Latvia in the 12 months to June.

Hungary

Elsewhere in Eastern Europe, prime high street rents in Bulgaria were

Hungary’s recent strong economic performance has been reflected in its

stable, while rents in Slovakia and Romania experienced marginal uplift.

retail property market. Budapest’s main high streets Váci Utca andAndrássy út turned in respective growth rates of 20% and 22% over the

In Slovenia, limited supply on Slovenska Street and Copova Street means

year to June, driven by sustained occupier demand from boththat demand from international retailers looking to open flagship storesinternational and domestic retailers seeking to expand their presence inremains unsatisfied.

the Hungarian capital.

Bulgaria
In Bulgaria, health & beauty, affordable fashion and athleisure retailers
have been the main drivers of occupier demand on Vitosha Boulevard in
Sofia. The location is a popular pedestrian zone and a high-footfall area
which also makes it attractive for various types of cafés, bars andrestaurants.

Czech R
Republic
epublic
In the Czech Republic, retailers have been bidding competitively forspace on Prague’s main high streets, helping to drive rental growth on
both Na Príkope (5%) and Parizska (7.7%). Prime high street locations

Budapest
Budapest’s’s main high streets V
Váci
áci UtUtca
ca and Andrássy út turned in
respectiv
respective
e growth rarattes of 20% and 22% o
ov
ver the yyear
ear ttoo Junehave seen a gradual shift in focus from mass market brands tailored to
the needs of the local population to premium retailers and F&B operators

Polandcapitalising on the high tourist numbers. Several development projects

In Poland, a positive economic backdrop characterised by steadily fallingunemployment and buoyant consumer spending has been a significant

Romaniaboost for the retail sector. However, new shopping centre development

Encouraged by a strong economic performance, the Romanian retailhas led to growing competition and this has led to downward pressure on

sector continues to benefit from buoyant occupier activity. Fashion

rents in some areas, notably in secondary locations. In Warsaw, the large

retailers have been particularly active, although their focus has largelyedge of town, Galeria Północna opened in the third quarter of 2017,

been on shopping centres rather than the major high streets.

housing an array of mass market retailers and a selection of F&B
operators.

Italy
Prime high street rents in Italy have generally been stable over the last

Slo
Slov
vakia

year, with significant upward adjustments only recorded in major cities

Slovakia’s economy is one of the fastest growing in the Euro area, with

where activity is also sustained by tourism. In particular, Venice continues

the retail sector benefiting from improvements in the labour market andto attract interest, with prime rents highest in Calle San Moisè, while Via

rising household incomes. New entrants, including Nespresso and Kiehl’s,Roma in Florence recorded a growth rate of around 29% compared with

continue to seek out opportunities across Slovakia and, with very limited

last year, among the strongest registered in Europe, sustained by theavailability in the country’s main shopping centres, nearby high streets

entry of top brands such as Prada, Armani, Michael Kors and Coach.

are benefitting from overspill demand.

“

Slovakia’s economy is one of the fastest growing in theEuro area, with the retail sector benefiting from
improvements in the labour market and risinghousehold incomes.

Via Roma, Florence recorded a growth rate of around 29% compared with last year.

International mass market retailers continue to play an important role onmonths to June, with a surge in visitor numbers helping to drive demand

Italian high streets and although domestic retailers have been cautious

in key locations.

with their expansion plans, brands such as Terranova, Alcott, Calzedonia
and Carpisa have all taken space in key locations over the last twelve
months. Food & beverage (F&B) operators have started to expand on thehigh street, providing new occupiers for secondary pitches.

Occupier demand on Lisbon’s traditional shopping streets has evolved
in recent years, as a slowdown in the premium sector has enabledmass market retailers to trial new concepts in high footfall locations.

Spain
Improvements in Spain’s economy and growth in international tourism

Supply shortages in prime locations are benefitting more secondary

have helped to boost prime rents in key locations in both Madrid andareas, as both domestic and international retailers seek to benefit from

Barcelona. Rents on Diagonal have risen by 16.7% in the last twelve

heavy tourist footfall. While there are few large retail developments

months, a marginal slowdown on the 20% recorded during the previous

planned in Lisbon or Porto, landlords are being proactive aboutyear. Elsewhere in Barcelona, rental growth was recorded on Rambla

refurbishing and reconfiguring existing retail space to satisfy demand for

Catalunya (5%), Passeig de Gracia (4.1%) and Portal de L’Angel (1.8%),

flagship stores.

whilst Gran Via, Fuencarral, Serrano, Preciados and Goya in Madrid also
benefited from an uplift in prime rents.

Greec
Greecee
Mass market and discount retailers have been the mainstay of recent

Elsewhere in Spain, high street rents have been largely stable. However,occupier demand in Greece, where improving economic fundamentals areavailability remains low as a result of healthy occupier demand from both

helping to stimulate domestic demand. In Athens, H&M and Inditex havedomestic and overseas retailers. Luxury retailers are once again bidding

introduced new fascias on Ermou, whilst JYSK and Forever 21 are also

for retail space across key cities in Spain, alongside mass market fashion

new to the Greek market.

retailers, F&B operators and cosmetics brands.
Low vacancy rates in prime locations have helped to generate rental

Portugal

growth on some pitches, including Ermou (12.8%), Glyfada – Metaxa

In Portugal, Chiado and Baixa in Lisbon and Baixa (Rua de Santa(4.3%), Kiffisia-Kolokotroni (4.5%) and Piraeus – Sotiros (7.1%) in Athens,

Catarina) in Porto recorded rental growth of around 15% over the 12

and Tsimiski (3.8%) in Thessaloniki. Greek high streets have historicallybeen protected from e-commerce by low online penetration rates,

Russiaalthough this is now changing as consumers have become more sensitive

In Russia, most of Moscow’s main streets have been undergoing

to price.

significant improvements, with a focus on encouraging pedestrians. These
include wider pavements and less, albeit more expensive parking in

Turk
Turke
ey

central areas. The changes have had a positive impact on high street

Turkish retail has encountered strong headwinds in recent years, withretail. Fresh food stores and restaurants dependent on footfall areongoing political issues and falling overseas visitor numbers – althoughreplacing fashion, footwear and accessories boutiques, while new higheconomic growth is now picking up. While there have been some notablestreet destinations are emerging and historic locations are seeing a

new entrants to the market, including Galleries Lafayette, Under Armour,revival.

Kiko Milano, MAC and NYX Professional Makeup, international retailers
have tended to favour shopping centre locations. As such, retailer activity
across Turkey’s main high streets remained muted in 2017, with domestic
retailers accounting for the majority of occupier interest in theselocations. Prime rents fell, on average, by 26% across all ten of Turkey’s
main shopping streets, with Tunali Hilmi Street in Ankara recording thegreatest decline of 40%.

UkraineIn Ukraine, rental growth on Kyiv’s main high streets has been volatile inrecent years, as ongoing political and economic uncertainty has taken its
toll. However, the opening of the renovated TSUM department store on
Kershchatyk Street in late 2016 has helped to reinvigorate the location
which had been struggling, with rents rising by 25% over the year to

In Moscow restaurants dependent on footfall are replacing fashion, footwear and accessories
boutiquesJune.
One of the most notable recent openings in Moscow city centre was an
Auchan supermarket on Tverskaya Street, a destination for premiumbrands. Online sales currently account for around 3-4% of total retail salesin Russia, although this is growing and retailers are beginning to develop
more robust omni-channel strategies.
On a positive note, retail rents are stabilising and vacancy rates for both
high streets and shopping centres appear to have peaked, with some infact showing a slight decrease in availability, while there are signs that
consumer confidence is making a gradual recovery.

ASIA PPAACIFICOVERVERVIEW
VIEW

ASIA PPAACIFIC IN
BRIEF

The short and medium term outlook for Asia Pacificremains a bright one, with economic growth stillbuoyant across the region and expected to outperformthe rest of the world in the coming years. As a result,demand from international retailers is continuing
apace, attracted by an increasingly wealthy andsophisticated consumer base, along with a steadily
improving retail infrastructure.
Food & beverage operators remain a key driver of demand, althoughhealth & beauty, fashion, sports and lifestyle brands have been equallyprominent across much of the region. Technology is playing a major role,
exemplified by Singapore’s drive towards becoming a smart nation, withretailers increasingly turning it to their advantage to attract customers
and drive store sales.

Australia

H&M, Zara, Uniqlo and more recently Sephora, Pandora and Swarovski

Activity in the Australian retail market has been limited by the low levels

have all been busy securing sites over the past 2-3 years and more newof availability but, with new developments and lease expiries on theentrants are expected. Retail sectors that continue to outperform are Fast

horizon, there are an increasing number of opportunities for landlords to

Fashion, cosmetics and luxury, closely followed by athletic wear, withsecure high quality tenants. One of the most recent trends has been for

Under Armour, 2XU, Lorna Jane and JD sports all trading well in thedomestic retailers to move to suburban shopping centre locations, which

Australian market.

has freed up CBD space for major international operators. These more
prominent CBD sites tend to command higher rents, which are more

With a maturing retail sector and a resurgence in inner city living, city

affordable to international retailers given their ability to generate higher

centre streets and malls will continue to see strong retailer demand.

turnovers. A recent example is ISPT’s GPO site on Melbourne’s Bourke

Extended trading hours will provide an additional boost to the market,

Street which was consolidated into a single store occupied by H&M,

with shops in some cities now open from 7am to 7pm and a further

having previously been occupied by a number of smaller stores.

liberalisation possible in Melbourne and Sydney.

China
China’s retail market continues to evolve in large part on the back of a
rapidly growing consumer base of increasingly savvy, brand-aware
shoppers with an eye for new and sophisticated retail experiences. Food
& Beverage retailers, notably trendy and experience-focused brands, havebeen the most active occupiers. Sports and health-focused brands are
expanding rapidly, while mass market fashion and cosmetics brands also
remain active.

Bourke Street, Melbourneevents and community gatherings – not just for shopping.

‘New retail’ is emerging strongly, particularly in mainland China, in
response to ever-growing consumer demands for retail experiences,emphasizing the need to integrate online, offline, big data andintelligent logistics. Major ‘new retail’ brands include Alibaba Group’s
Hema Xiansheng, Xiaomi’s Mi Home and Bailian Group’s RISO.

However, department stores remain under pressure and several haveceased trading in major cities such as Beijing, Shanghai, Chengdu,
Chongqing and Shenzhen. A number of stores have also refurbished andadjusted their tenant mix to boost performance in an intenselycompetitive and fast-changing retail market.

Shoppers in China are increasingly savvy, brand-aware, with an eye for new and sophisticatedretail experiences.

Shopping centres are now the focus of growth in the retail sector andhave been busy adding more experiential tenants such as cinemas, virtual“

New retail development in Beijing continues to emerge,with approximately 0.75 million sq.m of new spacescheduled for delivery in 2018.

reality (VR) centres, bookstores and health & beauty salons in order togenerate footfall and customer loyalty. Most shopping centres in the
major cities have invested in new technologies such as mobile payment,

In Beijing, recent demand has been led by Food & Beverage andsmart parking and customer service robots. In line with the wider global

experience-led operators such as virtual reality centres, do-it-yourself

trend, Chinese shopping centres are now places for entertainment, public(DIY) workshops and cinemas, although demand for neighbourhood

shopping is also growing. Luxury retail has rebounded since the end ofHong K
Kong
ong

2016, with younger consumers increasingly buying expensive items for

Retail rents along Hong Kong’s main shopping streets continued to fall

their own use rather than gifts. The city’s online retail market has

steadily over the 12 months to June 2017, although at a much slower paceexperienced exceptionally strong growth and internet sales now accountthan the previous year. Rents fell by around 5-6%, compared with thefor circa 18% of the total. New development also continues to emerge,

double-digit declines seen in 2015/16.

with approximately 0.75 million sq.m of new space scheduled for delivery
in 2018, most of which is in the southern area of the city. Rents in theLower rents are largely the result of the sharp decline in visitors frommain shopping districts such as Wangfujing and the CBD have been fairly

mainland China, which has prompted caution among many retailers,

stable over the last twelve months.

particularly at the upper end of the market. A number of retailers haveconsolidated their store networks in the city.

In Shanghai meanwhile, rents have also shown limited movement, despite
buoyant retail sales growth and a relatively limited supply of space.

As a result, there has been an increasing focus on attracting local

Indeed, 2016 recorded just 94,000 sq.m of new supply in the city’s core

consumers. The F&B sector has been among the most active, along withareas (namely Nanjing East Road, Nanjing West Road, Huaihai Middle

mass and mid-market brands, particularly in the cosmetics and fashion

Road, Xujiahui and Lujiazui). Moreover, the only new supply delivered inaccessories segments.

the core area in the first half of 2017 was the 100,000 sq.m HKRI Taikoo
Hui shopping complex, compared with a total of 290,000 sq.m elsewherein the city.
F&B operators have been the most active occupiers, accounting for asmuch as 35-40% of tenants in community retail projects, while schemes in
the city’s core areas are also adding more fast casual restaurants to theirtenant mixes. Going forward, rents are not expected to rise significantly,
with current high levels, a slowing economy and strong competition fromonline causing a degree of tenant sensitivity to higher rents.

So far, with the exception of fast fashion, the impact of online retail has

As sports fashion brands expand their offerings beyond running apparelbeen limited due to consumer preferences for convenience and forto include ball sports, Taipei’s first Nike & Jordan Basketball Experiencehandling merchandise. In most of the core retail markets, rents are

Store has opened in Ximen. The concept store combines a retail

expected to reach their floor and should stabilise in the next 12 months.

component with activities, classic collection displays and customized
services and is a good example of how international sports brands are

Taiwanexpanding aggressively in the Taiwanese market.

In the last 12 months, the vacancy rate in Taipei’s Zhongxiao retail hub has
risen steadily, which has prompted landlords to lower their asking rents.

F&B has also been an active sector in recent years, with international

However, a number of famous brands are geared up to open stores in therestaurant brands expanding rapidly. Hawker Chan Taiwan, Ichiran Ramen

Ximen retail hub, which specialises in fashion for young people and is

and Tsuta Ramen recently opened new outlets, indicating the current

known as a tourist hotspot. That said, rents in the Ximen retail hub are on

strength of the market.

the high side, which means that rental growth will be limited in the shortterm despite strong tourist data. As another indicator of rising tourism

India

demand, cosmetics and drugstores such as GS Retail’s Watsons andOverall, the Mumbai retail market has been active, although high streets

Cosmed are providing overseas customers with VAT refund services on

have under-performed shopping centres. With the exception of the foodsmall purchases.

& beverage sector, leasing activity on the main high streets has beensluggish. Indeed, rental values declined by 1-2% on Colaba Causeway and
Linking Road over the year to June, although they remained stable inother key locations. Given its importance as the prime office district,
Bandra-Kurla Complex attracted international brands such as Nara Thai,
Longchamp and Jo Malone. Meanwhile, shopping centres are focused on
optimising their tenant mix and locations such as Lower Parel, Kurla,
Ghatkopar and Malad are witnessing significant churn. Consequently,
these locations experienced modest rental uplift on the back of strong
demand for limited availability, with no new completions in the first half of

Ximen, Taipei, Taiwan - a tourist hotspot, where rents are on the high side2017.

food courts in IT parks and shopping centres. A number of prominent
Hyderabad-based restaurants are also expanding in tier 2 cities in both
Quick Service Restaurant (QSR) and fine dining formats. The arrival of thewedding season and festivals towards the year-end has resulted in a
sharp upturn in demand from numerous regional ethic clothing brands forsmall units in the key streets of Banjara and Jubilee Hills. The city’s strong
shopping centre pipeline for late 2018 is expected to maintain a healthy
level of leasing activity across the major retail submarkets.

In New Delhi NCR, F&B, fashion, health & beauty and lifestyle retailers have been the most active

In New Delhi NCR, F&B, fashion, health & beauty and lifestyle retailers
have been the most active on the major high streets. These include a mix
of international brands such as Starbucks, Domino’s, Skechers, Decathlon
and domestic ones such as Pind Balluchi, Theobroma, Brew Buddy,
Fabindia, AND, Pantaloons, Planet Fashion, Blackberry and GeetanjaliSalon. In addition, a number of motor manufacturers such as Royal
Enfield, Nexa and Triumph have taken space in key South Delhi locations.
Because of the healthy levels of leasing activity, rents showed an increase

The arrival of the wedding season and festivals has created demand from regional ethic clothing
brands for small units in Hyderabadof 4-5% in the prime main streets of Khan Market and Connaught Place in
Delhi and 3-4% in DLF Galleria and Sector 29 in Gurugram this year, even

In Chennai, the major high streets have been leading leasing activity, withas shopping centre rents remained stable.

F&B, footwear and fashion accessories driving demand. Domestic brands
such as Lawrence & Mayo, Café Coffee Day and international brands such

The Hyderabad market has experienced a surge in activity from F&B

as Hush Puppies and Bata have been particularly active. Fashion andoperators, which is seeing the emergence of various formats to suit thelifestyle retailers have led demand for shopping centre space, with

international brands such as Pepe Jeans and Bobbi Brown, and domestic

platforms. Other retail formats such as food trucks on the main streets

brands such as Maybell and O2 Spa among the most active. Apart fromare also growing in number, posing increased competition for many fast

the traditional retail hotspots of Adyar and Mylapore, strong leasing

food/casual dining outlets in the city.

activity has also been seen in newly emerging retail hubs such as OMR,GST Road and Ambattur (MTH Road). Rents have been largely stable overOver-supply in select micro-markets has resulted in the closure of athe last year, with supply and demand in relative equilibrium.

number of shopping centres in Pune. Rents remained stable, except in thehigh street of Aundh, which experienced a 3% fall following the openingof the Westend Mall, and may decline further. Solid demand from F&B
and lifestyle retailers continues to boost activity levels on M.G. Road andKoregaon Park and rents are expected to increase, with demand
exceeding supply.

Indonesia
Retail rents in Jakarta’s city centre recorded modest growth over the year
to June, with a sluggish economy leading to lower retail sales, asconsumers adopt a more cautious approach to spending. Online sales arealso taking an increasing share of overall sales, notably in the fashion andconsumer electronics sectors.
Across India, Food & Beverage demand boosts market activity

However, Indonesia and Jakarta in particular will remain key target
Rents in Bengaluru were unchanged over the year to June, with supply

markets for international retailers, especially in the F&B sector. New F&B

keeping pace with demand. Evolving retailer strategies have been very

concepts continue to flourish, with operators creating increasingly

much in evidence, with many domestic online retailers such as Pepper

innovative concepts to attract consumers.

Fry, Urban Ladder and Zivame launching their offline stores, while
traditional ‘bricks & mortar’ retailers such as Lifestyle Group, Pantaloons
and Tata Group have renewed their focus on developing their online

“Indonesia, and Jakarta in particular, will remain key
target markets for international retailers, especially in
the F&B sector.

more strongly in the next few years. Shinjuku is very different in that itwas never intended to be a street level retail location. However, the sheer
volume of people using the train and underground systems on a daily
basis meant that the area naturally developed into a viable retail market,
with strong occupier demand. This is expected to continue for theforeseeable future.

While the recent weakness in retail sales has led to store closures, most
retailers remain optimistic about the market’s future prospects and havecontinued with their expansion plans. As a result, occupancy rates in the
key retail locations are relatively stable and enquiries from local andinternational brands are continuing.

Japan
In Q2 2017, “Ginza Six”, the Ginza’s newest mixed use development,
located on the former site of Matsuzakaya Ginza, opened to much fanfare
and media attention. The retail portion of this development features 241
shops, the majority of which are luxury brands. The facility managed to
attract 1.5 million visitors in just 18 days. Rental levels in Ginza areperceived to be at a peak and further significant growth is unlikely in thenear future.
While rents in Omotesando, Harajuku and Aoyama have historically been
higher, rents in Shinjuku have largely closed the gap on these areas. Given
the supply and demand balance, it is likely that rents in Shinjuku will growShinjuku, Japan - given the supply and demand balance, rents in Shinjuku will likely grow morestrongly in the next few years

the 2020 Olympics in Tokyo.
Over the longer term, rents in Shibuya and Ikebukuro should benefit fromredevelopment projects around the station areas. However, the overall

The Philippines

effects of these projects will vary significantly from location to location.

The Philippines continues to be competitive in terms of occupancy costs

Ikebukuro’s new developments are located in established retail locations

among emerging markets in the APAC region. In fact, the recent increase

and will contribute to the overall growth of the area by improving its

in new mall space has meant that asking rents in some schemes haveimage. In contrast, Shibuya will see the expansion of the existing retailcome down to help attract tenants.

pitch and a fundamental change to its pedestrian traffic flows.

“

The current buoyant activity being seen in Japan’s retailsector is expected to continue at least until the 2020
Olympics in Tokyo.

The main drivers include the emergence of community malls aimed at
specific demographic groups which offer lower rents, a relative oversupply of space caused by new development and developers’ desire to
attract new and expanding foreign brands.
F&B operators continue to outpace other retail categories in terms of
expansion, while Fast Fashion brands have also continued theiraggressive expansion plans in and outside Metro Manila. The growth of
online is having an impact on the market, with an increasing number ofbrands establishing an online presence. However, bricks-and-mortar

Currently, the strongest demand for new store openings is coming fromstores will remain relevant for the foreseeable future, as online is currently

sports and athleisure brands. The drivers for this activity can be primarily

viewed as more of a complement to the physical store network rather

attributed to the 2020 Olympics and an increased focus on health andthan as a threat. E-commerce has generated more demand for pop-up/

wellness. In fact, the leading retailer Lululemon has re-entered theshowroom space where consumers can interact with online brands on a

Japanese market and a handful of other major brands have also been

temporary basis.

active, including New Balance, with their Harajuku Flagship and Uniqlo
with their ‘Move’ brand opening in Shinjuku. The current buoyant activity

Negative sentiment resulting from struggling US and UK retailers at abeing seen in Japan’s retail sector is expected to continue at least until

more global level, combined with increasing domestic competition, areweighing on the local retail scene. However, on a positive note, the retail

While some fashion and accessories brands such as Chomel and Foreversector is becoming more innovative and dynamic, with the continual

21 have consolidated their Singapore operations, many big box retailers

expansion of new and existing foreign brands underlining the increasing

such as Courts, Decathlon, Gain City and Harvey Norman are investingprominence of the Philippines as a retail destination.

heavily in their e-commerce platforms to complement their store
networks. With Amazon Prime Now in the market, retailers are innovating

Singaporeto stay relevant and are competing for sales through an improved omni-

The Singapore retail market has been resilient and retail sales arechannel presence.

generally up compared with a year ago. F&B continues to be a major
driver of activity, with upmarket operators such as Pablo, Pizza Express,

Many shopping centres including Century Square, Funan Mall, and

Da Paolo Gastronomia and PS Café expanding, while a number of mass

SingPost Centre are also investing significantly in improving their tenant

market operators including Din Tai Fung, Let’s Eat, Burger King andmixes and overall look and feel. Well-located shopping malls, especially

Jollibee have also continued to open new outlets.

those in key suburban locations such as Jurong, Yishun/Woodlands,
Tampines and Sengkang/Punggol, continue to benefit from a healthy

Singapore’s CBD has seen something of a renaissance, with more spaceresidential catchment with a high frequency of shopping.

being taken by F&B operators such as Fun Toast, Jewel Coffee, My
Izakaya, Ju Hao Xiao Long Bao, O’Coffee Club and Wheat among others.

Looking ahead, demand from F&B operators and potentially more
temporary or ’pop-up’ stores will continue to support the market, withlandlords looking to assemble more interesting tenant line-ups andshopping environments. As technology progresses, Singapore ispreparing to become a smart nation where more mobile engagement isencouraged. Indeed, the Association of Banks in Singapore recently
launched a secure peer-to-peer payment platform which enables the
direct transfer of funds among seven participating banks and includes
retailers.

Singapore's Central Business District is attracting Food & Beverage operators

In line with this, the application of data analytics will continue to becritical for the survival of shopping centres and retailers. Similarly,

Lifestyle brands continue to expand and there is strong competition

shoppers will become even more discerning and sophisticated, withamong brands such as Daiso, Miniso, Butter and Flying Tiger Copenhagen.

access to more e-payment options across offline and online platforms,

One of the most talked about retail brands in Korea has been theoffered in conjunction with various reward and loyalty programmes.

character store LINE FRIENDS, which is growing rapidly. Despite thecurrent sluggish economic backdrop and weak rental growth, global

South K
Korea
orea

investors and foreign retailers continue to enter the Korean market, which

Rental growth in the main retail locations has been slow on the back of awill continue to play an important role as a test bed for brands seeking todecrease in the number of Chinese tourists. However, Gangnam andexpand more widely across the region.

Myeongdong remain the most pre-eminent retail streets, with new foreign
entrants increasingly choosing to open their first flagship stores here.

ThailandRecently, Boots, one of the UK’s leading Health & Beauty retailers, opened

Recent rental growth has been fairly limited, although retailer demand is

its first flagship store in Myeongdong, a move expected to lead to greaterrobust, with lifestyle and F&B operators among the most active. Online

competition with other H&B retailers such as CJ Group’s Olive

retail is growing and many retailers are trying to introduce new online

Young, Watsons and Lotte’s LOHB’s. The first Shake Shack restaurant in

platforms to reach customers around the world. For example, Aux Villes

Korea opened in Gangnam in 2016 and quickly became one of the

Du Monde is a new service from Central Luxury Collection which brings

company’s best-performing restaurants globally.

together the most iconic luxury department stores around the world.

“

Another platform, On Demand, offers a service which allows a customer

Global investors and foreign retailers continue to enter
the Korean market which plays an important role as atest bed for brands seeking to expand more widely
across the region.

to shop all over the world through WhatsApp.
Increased competition from online has prompted some shopping malldevelopers to focus on improving and repositioning their existing malls,
rather than building new schemes or expanding in new markets, although
there have been a few exceptions.

AMERICAAMERICASS OVERVERVIEW
VIEW

AMERICAAMERICAS
S IN
BRIEF

Across the Americas, recent economic growth has
been encouraging and looks set to remain so in 2018.
However, retail real estate trends have varied acrossthe region’s diverse set of markets. While the growth of
online retail is a common theme in all of them, retailingin much of Latin America is still maturing.
However, most of the region’s developed cities now have high quality
retail developments which cater for a variety of income groups, including
a rapidly growing middle class. In the US, while there has been a lot of
discussion around store closures, the main high street markets have notbeen as adversely affected as some of the headlines might suggest. The
fact is that most retailers are not turning their backs on high street
locations.

Canada

Halal Guys opening shop on Yonge Street in Toronto, to both fanfare andRetail rents are reaching both new highs and new lows across the mostoften unseen line-ups for beef gyros - speaking to the needs of the young

popular retail streets in Canada, as the battle between location, quality

urban millennial.

and size of space, and the impact of rising vacancy, driven by the
disruption of e-commerce, plays out across core and non-core high-street

Athletic apparel has remained a buoyant sector in 2017, with companies

locations.

such as Vancouver-based RYU Apparel opening in Toronto’s trendy
Queen Street West district, following on the path of Nobis, Icebreaker andWhile rents have generally shown modest falls (except in core locations),

Lululemon. Pop-ups or temporary retail openings are now common, as

Canadian retailers are exploring change with a new urgency, fromcompanies test out local demand and new concepts.

concept, to store experience, to location, including seeking out newformats in “cool-street” areas to buffer or replace traditional high-street

Food-centric retail, restaurants and bars, health and fitness, andlocations. These streets can provide a much needed gross rent advantage

experiential retail are just some examples of winning categories in a fast-in this competitive retail environment.

changing retail market. The sector is also benefitting from changing“

preferences, as young urban consumers shed their cars whilst insisting on

Canadian retailers are exploring change with a newurgency, from concept, to store experience, to location,
including seeking out new formats in “cool-street” areas
to buffer or replace traditional high-street locations.

intimate knowledge of every food establishment within walking distanceof their urban enclave.

Unit
Uniteded S
Statattes
NEW Y
YORK
ORK
In the US, a number of retail submarkets in New York’s Manhattan
recorded lower asking rents and higher availability at the mid-year point,
including SoHo, Times Square and Meatpacking. However, the top-tiermarket, Upper Fifth Avenue (49th Street to 60th Street), continues toApparel has been hit particularly hard by the evolution of e-commerce.

command the highest asking rent both locally and globally for direct andCreative and innovative new arrivals are helping to backfill store fronts

subleased space. As at June, the asking rent was US$3,000per sq.ft,

left vacant by unsuccessful retailers. This includes food concepts such as

unchanged on 2016, albeit nearly 20% up over five years and back to its

pre-global financial crisis level.

“

Upper Fifth Avenue (49th Street to 60th Street),continues to command the highest asking rent both
locally and globally for direct and subleased space.
CHICA
CHICAGOGO
Chicago has experienced continued growth in all its submarkets, mostThe food hall concept continues to expand rapidly throughout
Manhattan and one of the most significant recent announcements was
the Cipriani family’s plans to open a new 28,000 sq.ft specialty market
in the base of a new Upper West Side residential development at Two
Waterline Square/30 Riverside Boulevard at West End Avenue. Trader
Joe’s also announced an additional supermarket commitment for
22,500 sq.ft at 432 East 14th Street in the East Village, a proposed
residential development near First Avenue.

notably with a number of fast casual and full service restaurants taking
space in the Loop and West Loop/Fulton Market areas. There has also
been an increase of e-commerce retailers opening stores across the city,
including Bonobos, Warby Parker, Untuckit, Bucketfeet and Marine Layeramong others. The steady growth in tourist numbers has given the city asignificant boost, with over fifty million visitors in 2016, making it one of
the USA’s most attractive markets for retailer expansion. Emerging retailsubmarkets include the Fulton Market District and Logan Square.
LOS ANGELES

The long-term outlook for the Manhattan retail market remains optimistic,

The Los Angeles retail market has experienced an increase in restaurants

with healthy consumer spending driven by steady employment growthand cafés that provide nutritional grab-and-go options or a dining setting

and New York City’s dominance in commerce, culture, and tourism.

that allows customers to feel comfortable coming from the gym or fromwork and anywhere in between. These restaurants can deliver a quick sitdown service while still serving locally sourced and organic clean-eats.
Many cafés have developed a model allowing them to provide an in-house

service, take-out and pre-made ‘grab and go’ items. Operators such as

the push for retailers to reinvent their business model with the use ofFreshii, Sweetgreen and Cava Grill continue to open outlets in the city,

technology, in order to enhance the customer shopping experience. Many

while newcomers such as Everytable recently opened at The Bloc.

retailers continue to reduce their footprint to cut costs and those signing
new leases are generally for shorter terms at lower rents. The West Palm

Looking forward, further consolidation in the market is expected, as

Beach market is very seasonal so it can be difficult to gauge retailer

retailers focus on reducing their physical footprint, leading to more

performance during the low season. While e-commerce will continue toconcentrated areas of retail. Other key trends will include more pop up

provide strong competition for physical retail, Palm Beach has a loyal

locations and a growing number of lifestyle centres, as well as thecustomer base which should continue to support the existing retailers forincreased use of technology such as Augmented Reality (AR) to enhance

the foreseeable future.

the customer experience and help retailers stay competitive.
MIAMI
In Miami, e-commerce is having a significant impact on the market, with
Amazon planning to open an 850,000 sq.ft distribution centre and manyretailers downsizing or closing stores altogether. However, the city
traditionally does well in difficult times due to its strength as a tourist
location and the number of foreigners with second homes who continue
to spend as normal. The city is also benefiting from a growing population
and rising employment. New development is generally focused on mixed
use which plays to the live-work-play trend, whereby retail is included toensure 24-hour use. Allapattah is an emerging hot spot for investors who
have been priced out of Wynwood, while American Dream Miami - a
5-million sq.ft retail and entertainment complex - is planned for thejunction of Interstate 75 and Miami Gardens Drive.
The main driver of the Palm Beach retail market along Worth Avenue is

Miami traditionally does well in difficult times due to its strength as a tourist location

sq.ft of high-end retail on the lower levels of a 1.6 million sq.ft mixed-use
tower, while the historic Pioneer Square will see three early 20th century
buildings upgraded, adding shops and restaurants at street level.

Amazon has undertaken several retail experiments in Seattle, including
a physical bookstore, a grocery store with no cashiers (Amazon Go!)and a roaming delivery truck (Amazon Treasure Truck).

WASHING
SHINGTTON DCIn Washington DC, niche retail continues to remain in demand among
consumers that are seeking a curated shopping experience, while online
retailers continue to open bricks & mortar outlets. H&M's sister brand &Other Stories opened its first area store on M Street in Georgetown inearly 2017, while Uniqlo opened a pop-up location in Union Station in
September.
Amazon's Campus in Seattle. Amazon has trialed new retail concepts in the city.

The southwest waterfront development known as The Wharf (expected to
SEA
SEATTLE
TTLE

open in late 2018) along with the ball park in the Capitol Riverfront have

Low vacancy rates in Seattle continue to drive up rental levels, despite

established these emerging markets as entertainment districts.

the impact of e-commerce on demand for physical space and three major
redevelopments are scheduled to begin in late 2017. The multimillion-

Looking ahead, technology will continue to shape the consumer

dollar remodel of Pacific Place, home to more than fifty shops andexperience, although the district's lack of urban logistics provision may

restaurants, will add a "grand entrance" to the up-and-coming South Lakeslow the growth of on-demand delivery services given the area's traffic

Union neighbourhood, where Amazon's new high-rise campus is located.

congestion. However, consumers will still demand a high quality retail

The centrally located Rainier Square redevelopment will include 90,000

experience when shopping and eating out, which will support curated

stores and chef-driven concepts.

for retailers, predominantly in accessible out-of-centre locations. San
Isidro and Miraflores remain significant shopping areas, although other

Me
Mexic
xico
o

districts such as Independencia in the north are also emerging as new

Rents in Mexico City’s key retail streets recorded steady uplift over the

shopping destinations. While Lima remains at the forefront of Peru’s ever-year to June, on the back of continuing economic stability. Interest from

improving retail infrastructure, modern retail and leisure centres are now

international retailers remains strong and more designer brands (notably

an established feature of other large cities.

from Europe) are expected to enter the market in the next 1-2 years,
adding to the increasingly diverse, competitive and sophisticated natureof the market.
Domestic retailers are adopting the business practices of the mostsuccessful US operators, so that local players such as Soriana, Chedraui
and Liverpool are competing successfully with Wal-Mart and otherforeign companies across different segments and categories of themarket.
The country’s retail infrastructure continues to modernise and Mexico’s
developed cities now have new world-class retail developments alongside
traditional markets, while mass market and luxury retail coexist to caterfor a variety of income groups. While the recent earthquakes may have ashort term impact on the economy, the outlook for consumer spending
growth in 2018 remains positive.

Peru
In Lima, shopping centres are posing a serious challenge to traditional
high street locations, as they provide an enhanced trading environment

GL
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RENTS
S

VIEW
GL
GLOB
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RETAIL
AIL
RENT
RENTS
S
...and sort the dadatata ttoo suit y
yourour needs.

TECHNICALSPECIFICA
SPECIFICATIONTIONTECH SPEC

included.

the unit is vacant and is available for letting on
the open market, without any request for

The information contained in this report has

In the dynamic international retailing sector,

premium (key money). However, in many top

been collected as at June 2017, in a

local market characteristics, technologicallocations around the world, vacant units arecomprehensive survey of Cushman &advancements and the evolution of new retailrarely marketed and substantial key money to

Wakefield’s international offices.

formats are just several of the forces that affectsitting tenants is often payable.

the size and configurations of retail units. As a
Our representation is designed to facilitate theresult, occupation costs vary from one country

Rents in most countries are supplied in local

rapid flow of information across borders and is

to another.

currency and converted to USD for the

supported by a comprehensive database of

purposes of international comparison. Rents inmarketing information and regular liaison

As far as possible, the objective is to provide a

the UK, Channel Islands, France and Ireland aremeetings. This allows for the exchange of local

realistic comparison of these costs, but theoriginally quoted in Zone A and are converted

market knowledge and expertise and for the

exercise is constrained by a number of factors.

to an overall basis.

co-ordination of strategy for international

These include differences in unit configuration,

investment and locational decision-making.

zoning practice and local lease structures –Main S
Streettreet Definition

such as lease length, the inclusion of rent

For the purposes of this survey, the standard

Data for retail rents relates to our professionals’

reviews to open market value and the right tomain street unit is defined – where possible –opinion of the rent obtainable on a standard

assign the lease.

as a unit with 150-200 sq.m of sales area.

unit in a prime pitch of 451 locations across 68

Typically, a unit has a frontage of 6-8 metres.

countries around the world. The report’s

The format selection for each city is based on

However, an element of flexibility is needed

analysis of rental performance does not include

its dominance of the retail landscape and/or its

with the definition, given that unit

some of the locations listed in the ‘Global Retailstatus as the prime pitch/top destination in theconfiguration varies from market to market.

Rents’ section due to the lack of an historicalcity. The rents represent our agents’ views asAssumptions regarding ancillary space follow

annual series. Service charges – such as

to what is consistently achievable for prime

local practice.

building insurance, local taxes and costs ofspace; indeed, we do not quote asking rents forrepair payable by the tenant – are not

the highest rent obtainable. It is assumed that

Shopping C
Centreentre Definition
A shopping centre is defined as a purpose-built
retail facility which is planned, developed,
owned and centrally-managed as a single
property. It typically has a gross leasable area
(GLA) of over 5,000 sq.m and is comprised ofover 10 retail units. However, an element offlexibility is needed concerning size andminimum number of units, given that they varyfrom market to market.

Country Definition
Hong Kong is ranked as a country in the report.
We recognise that Hong Kong is part of China,
although it is a free-market economy with its
own currency, separate legal, taxation,
parliamentary systems and business guidelines
to that of mainland China. For these reasons it
falls into the country category.

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and cover geographic regions, shopping

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centres, out of town, leisure and restaurants,

Americas Retailand lease advisory. Enhanced by our dedicateddavid.gorelick@cushwake.com

cross-border retail teams, we offer the widest+1 212 841 5008

range of services from any retail advisory
company with true accountability and a clear

Garrick Brown

understanding of our clients’ needs.

Americas Research
garrick.brown@cushwake.com+1 916 329 1558

EMEA
Justin Taylor

Pamela FloraThank you for reading

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