Retail Rents Moderate in 3Q11

The European debt crisis has made an impact on consumer confidence worldwide, moderating 3Q11 retail rental rates in all global regions, according to CB Richard Ellis research. Yet “retailers continued to expand their store networks to gain market share during the third quarter,” said Anthony Buono, CBRE’s executive managing director of retail services. “In particular, Asia has seen significant levels of occupier demand in destinations such as Singapore, China, and India, while retailers in the U.S. and Western Europe have generally remained more cautious.”

New York’s Fifth Avenue remains the world’s most expensive shopping destination, with annual rents averaging $1,900 per square foot, followed by Hong Kong ($1,695 psf), Sydney ($1,224 psf), and London ($961 psf).

“The emerging markets, particularly Asia, provide attractive opportunities for growth, although prime locations in Europe’s biggest cities are also attracting a high level of occupier demand, as consumers increasingly target major destinations with the widest choice of retailers,” said Ray Torto, CBRE’s global chief economist. “Overall, however, retailers have been taking a more cautious approach to expansion, resulting in flat rental growth across the globe in the third quarter -— a considerable slowdown from earlier in the year.”