ORCHARD Road prime rents have hit $325US psf per year, making it the world’s 14th most expensive area for shopkeepers. By contrast, annual prime rents for sites on New York’s Fifth Avenue are $1US,500 psf, or $922US for sites on the Avenue des Champs Elysees, in Paris.
Orchard Road is also the fourth most expensive shopping location in this region - after those in Hong Kong (Causeway Bay - $1US,213 psf/year), Tokyo (Ginza - $683US psf/year) and Seoul (Gangnam Station - $431US psf/year).
A report by Cushman & Wakefield (C&W) shows that Singapore’s busiest shopping street did slip one place from its previous 13th position last year but attributed this to the strength of the euro over the Singapore dollar.
C&W’s report tracks retail rents in the world’s top 231 shopping locations across 44 countries. Its data show that annual prime rents increased by 11.3 per cent for Orchard Road while in the top three most expensive locations in New York’s Fifth Avenue, Hong Kong’s Causeway Bay and Paris’s Avenue des Champs Elysees, rents increased by 11.1, 6.97 and 14.5 per cent respectively.
At the fourth and fifth most expensive locations - London’s New Bond Street ($814US psf/year) and Tokyo’s Ginza - annual rents increased by 20.95 and 4.8 per cent respectively.
Although C&W expects retail rents in Singapore to continue their upward trend, it noted that rents in other cities have increased faster, notably in India. It believes that this will help make Singapore more competitive and maintain its attractiveness as a retail destination in the region.
Rental growth across Asia as a whole increased by 23.8 per cent. C&W head of retail services (Asia Pacific) Sebastian Skiff said: ‘Of particular note is the robust performance in Tokyo driven largely by lack of supply. India saw particularly strong growth, with rents nationally up 53.5 per cent.’
He also noted that Australia, Korea, SingaporeÂ and Hong Kong saw solid growth from already relatively high bases.
On the demand for prime retail space, C&W’s global head of retail, John Strachan, said: ‘We are seeing the emergence of a line-up of global shopping destinations, whether Fifth Avenue in New York, Causeway Bay in Hong Kong or Avenue des Champs Elysees in Paris, where retailers are using flagship stores in prestige locations to leverage the value of their brands.’
Globally, Chicago’s Oak Street was the location with the biggest rental increases in local currency. Rents for prime properties doubled in one year.
This was followed by rents in New Delhi’s Ansal Plaza and Connaught Place which saw annual increases of 87.5 per cent while rents in St Petersburg’s Nevsky Prospekt increase by 81.8 per cent.
Source : Business Times - 20 Nov 2007