They are the streets of dreams and often contain our favourite watch stores. The world’s most expensive streets attract a steady stream of tourists and window shoppers on a pilgrimage, in search of a photo or a coffee in one of these legendary locations. Another, more exclusive, customer visits the same streets to go shopping in one of the many luxury stores on them. In these expensive areas, demand for luxury goods is one of the main factors behind the high rents. The most recent report by Cushman & Wakefield lists not only the world’s most expensive streets by country but also allows us to measure the impact of political and economic changes on the rental market.
The slump
Two streets in particular have seen their rental values plummet over the past year. Hong Kong’s Causeway Bay is second in the list, conceding first place to New York’s Fifth Avenue for the second consecutive year. The slow-down in China’s economy, the anti-corruption measures of the Chinese government and the strength of the dollar have eaten away at demand for luxury goods in the territory. Rents on Causeway Bay fell by 12% after already dropping by 6.8% in 2014. But far from being solely negative, this reduction could help new watch brands set up in the territory, attracted by more reasonable rents.
In Moscow, Stoleshnikov Street saw a drop in rental prices of 29.2%, kicking it out of the world’s top 10 as a direct consequence of the uncertain geopolitical situation in the country since the start of the conflict in Ukraine.
Stable or progressing
Stability reigns above all in Switzerland, where rental prices remain unchanged in the most expensive streets. Zurich’s Bahnhofstrasse maintains an annual rental price of €8,643 per square metre but moves ahead of the most expensive streets in Tokyo and Seoul, where prices dropped last year. Geneva’s rue du Rhône, which has one of the highest concentrations of watch stores per square metre, has an average price of €3,841, a relatively “affordable” cost of entry for retailers when compared with prices in the world’s other major cities. New York’s Fifth Avenue still has a mind-boggling average annual rental of €33,812 per square metre, thanks to the scarcity of rental properties and the strong demand from luxury brands. Rents there are increasing at around 4% per year. The same dynamic applies on New Bond Street in London and Via Montenapoleone in Milan. These two European shopping attractions saw their rental prices leap by 12% and 25% respectively last year. In spite of the political and economic uncertainty that is set to continue this year, Cushman & Wakefield expect an economic upturn to push up prices even further.
The top 10 most expensive streets for commercial real estate rental by country:
1. New York – Upper 5th Avenue (49th – 60th Streets) – €33,812
2. Hong Kong – Causeway Bay – €23,178
3. Paris – Champs Élysées – €13,255
4. London – New Bond Street – €12,762
5. Milan – Via Montenapoleone – €10,000
6. Zurich – Bahnhofstrasse – €8,643
7. Tokyo – The Ginza – €8,520
8. Seoul – Myeongdong – €8,519
9. Vienna – Kohlmarkt – €4,620
10. Munich – Kaufinger/Neuhauser – €4,440
Source: Cushman & Wakefield (prices in € per square metre)
