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High-End Retail Rents Lose Altitude

NEW YORK CITY—Fifth Avenue and most of the world's other top-tier shopping districts globally saw year-over-year rent declines, says Cushman & Wakefield.

By Paul Bubny | Updated on September 23, 2009

NEW YORK CITY—The economic downturn has finally made its presence felt along the likes of Fifth Avenue in Manhattan, Grafton Street in Dublin and Colaba Causeway in Mumbai. Fifty-four percent of the 274 top-tier shopping streets worldwide and 70% of the 60 countries monitored by Cushman & Wakefield experienced a year-over-year decline in retail rents compared to June 2008, according to a report released Tuesday. That tally is the largest in the 24 years that C&W has issued its annual “Main Streets Across the World” report.

Within those high-end shopping districts, the rate of decline varies widely. The 8.1% year-over-year decline in asking rents along Fifth Avenue–still the world’s most expensive at $1,700 per square foot–looks pretty modest compared to the steep drops experienced by Bucharest’s Calea Victoriei with a 48.1% drop, Rio de Janeiro’s Sao Conrado Fashion Mall at negative 53.4% and Mumbai’s Colaba Causeway, which fell 63.5%.

“Fifth Avenue continues to provide global retail brands with the premier opportunity to communicate their message to the broadest possible international audience,” says Gene Spiegelman, New York-based EVP at C&W. “Limited supply of prime positions combined with continued demand has minimized the downward pressure on Fifth Avenue rental values.”

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