Miami's Lincoln Road Remains Among Top Global Retail Streets
According to Cushman & Wakefield's latest Main Streets Across the World
report, which tracks 462 of the top retail streets around the globe and ranks them by their prime rental value, Miami's Lincoln Road remained the fourth most expensive retail street in the Americas with average rents of $325 per square foot per year. These rents matched those reported one year ago.
The report, now in its 28th edition, also includes a ranking of the 71 most expensive streets -- one per country. This year's report showed that 36 percent of all streets analyzed saw rental gains.
Lincoln Road has enjoyed a long upward trend in both taking rents and demand from global retailers," said Senior Director Greg Masin. "While the street remains a highly relevant and necessary touch point for the retailer to the customer, pressure to manage fixed costs and re-evaluation by retailers of their models and how they most effectively reach the consumer has become an issue."
"Thus, we have seen a slowing of velocity of transactions on Lincoln Road and flattening, and in some cases reduction, of asking rents," added Masin. "We expect this trend to continue in the near term."
In the US, publicly-traded apparel chains remain under immense pressure from Wall Street to be more efficient and this has meant closing underperforming stores, cutting overheads and improving margins. This trend has particularly affected the high street and mall sectors in the U.S. and it will continue heading into 2017. There has also been slowing demand from global brands looking for flagship space in New York, with the few new entrants that there have been being extremely cautious in their site selection process.
"Throughout 2016 the Americas region has benefited from stable consumer spending that has been sustained by steady employment and lower energy prices," said Gene Spiegelman, Cushman & Wakefield's Vice Chairman, Head of Retail Services, North America. "This is an enduring trend from 2015 that we forecast to continue into 2017."
"The larger question, for 2017 and beyond, will be the unrelenting rebalancing of sales origination - bricks and mortar versus e-commerce," added Spiegelman. "The urban retail sector will continue to benefit from global brands seeking tangible connections with the consumer while the pressure will build upon enclosed malls and open air shopping centers to continually enhance their shopping experience and differentiate their market positions to maintain competitiveness in the continuous advancement of the 'bricks and clicks' model."
New York's Upper 5th Avenue remains the world's most expensive retail street, narrowly ahead of Hong Kong's Causeway Bay, but rental values have decreased in both as brands balance the demands of physical and online presences, according to Cushman & Wakefield.
Upper 5th Avenue, which saw its first decrease in annual rents per square foot since the financial crisis, and Causeway Bay are both more than twice as expensive as the leading street in any other country.
Paris' Avenue des Champs Élysées, where annual rents are $1,368 per square foot, is third, London's New Bond Street is fourth ($1,283) with Tokyo's Ginza leapfrogging into fifth place with annual rents totaling $1,249. Myeongdong in Seoul, which climbed one place to eighth, was the only other upwards mover in the top 10.