Madison Ave. retail rent up 25 percent
By Elizabeth Hayes
Bloomberg News Service
NEW YORK Midtown Manhattan had the world's most expensive retail space for a third year as De Beers, Boucheron and Louis Vuitton shops opened, helping prevent rents from falling after last year's terrorist attacks, according to a Cushman & Wakefield survey.
Rents in the shopping district on Fifth Avenue from 52nd to 58th streets and along East 57th Street to Madison Avenue averaged $700 a square foot, 20 percent higher than on second-ranked Avenue des Champs Elysees in Paris, the brokerage found. Rents fell in San Francisco and Buenos Aires.
Madison Avenue's rents had the biggest increase in the United States, rising 25 percent to $650 a foot, according to the survey, which compares rents as of June 30 with a year earlier.
The biggest decline in retail rents in the United States was in the Union Square area of San Francisco, which was hit by the loss of 150,000 jobs in the region in the past two years and a drop in tourism after the 2001 terrorist attacks. Retail rents fell to $200 a foot, off 20 percent from their peak in late 1999 or early 2000, said Kazuko Morgan, a Cushman senior director.
The Union Square vacancy rate has risen to about 13 percent from 2 percent, as retailers such as Bally and Club Monaco have moved out or signed leases and not moved in, she said.
Worldwide, the location with the highest rental growth was Kuwait City, where rents more than tripled with the opening of Western-style malls.
The steepest decline was 75 percent in Buenos Aires' Florida district, to $45 a foot. Argentina, which defaulted on $95 billion in obligations to private lenders in January and saw its currency devaluated, is in its worst economic condition in seven decades.
Rounding out the top five most expensive retail locations worldwide are Hong Kong's Causeway Bay, at $500 a square foot, London's Oxford Street, $434; and Sydney's Pitt Street Mall, $314.
Riga, Latvia, was the cheapest of 44 markets surveyed, at $39 a square foot.