Luxury retail rents hold up against e-commerce

Article Excerpt

The rapid growth of online shopping continues to make headlines, but high-end, bricks-and-mortar retailers have fared better at protecting their instore sales than lower-end retailers. Nevertheless, those operators still face extremely high operating costs. The real estate consulting firm Cushman and Wakefield recently identified the Causeway Bay area of Hong Kong as the most expensive retail shopping location in the world. On this street, annual rental rates average $2,671 U.S. per square foot. This means that a retailer leasing a 1,000 square feet store will pay a base rent of $2.7 million per year. New York’s Upper 5th Avenue has the second-highest average rents of any shopping street worldwide at $2,250 U.S. a square foot annually. Cartier and Apple have flagship stores on that stretch of 5th Avenue between 49th and 60th streets. New Bond Street in London has the third-highest rents globally at $1,744 U.S. per square foot annually. Cartier, Valentine, Gucci, Bulgari, Fendi, Corneliani and Zegna are among the high-end retailers…

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