Now in its 34th edition, the report focuses on headline rents in 138 best-in-class urban retail locations across the globe, many of which are linked to the luxury sector, utilising Cushman & Wakefield’s proprietary data. The global index ranks the most expensive destination in each market.
Synonymous with fashion and luxury, Via Montenapoleone has steadily climbed the rankings in recent years, reaching second for the first time in 2023. Rents rose 11% to $2,047 per square foot (psf) in the past 12 months, whereas rents on Upper 5th Avenue ($2,000) remained flat for a second consecutive year. Alongside continuing strong retailer demand amid constrained supply, Via Montenapoleone also benefitted from the euro’s appreciation against the U.S. dollar.
London’s New Bond Street ($1,762) leapfrogged Hong Kong’s Tsim Sha Tsui to take third, despite the latter’s positive rental growth. With 10% year-on-year (YOY) rental growth, Paris’s Avenue des Champs Élysées retained fifth position, although Tokyo’s Ginza district narrowed the gap with a 25% YOY increase,
Robert Travers, Head of EMEA Retail at Cushman & Wakefield, said: “These globally iconic locations are characterised by intense competition for space and extremely limited supply, even in challenging retail market conditions. Brands, from luxury to mass market, are doubling down on their physical stores in the top locations as competition for consumer attention drives the need for a superior shopping experience and product showcase. While e-commerce plays a role in an omni-channel strategy, it is the physical embodiment of the brand that customers connect with. As a result, vacancy rates remain exceptionally tight which translates into the rents that retailers are willing to pay to secure and retain their space.”
Table 1: Main Streets Across the World – Global Ranking by Market 2024. Source: Cushman & Wakefield
Competitive tension for limited space saw YOY rental growth recorded in 57% (79) of the 138 locations tracked, declines in just 14% (19) , with the remainder 29% (40) flat. This resulted in a global average rental increase of 4.4%. Americas was the strongest performer regionally at 8.5%, driven by rental growth of almost 11% in the U.S. – more than double the 5.2% recorded last year – followed by Europe and Asia Pacific at 3.5% and 3.1% respectively. Rents across the 138 locations are now on average nearly 6% above pre-pandemic levels.
Beneath these global and regional trends, there are significant local variations.
Europe
Budapest’s Vaci utca led the rental increases, growing 27% YOY off a relatively low base (the city ranked 29th overall), driven by strong retailer demand in an environment of constrained supply. In absolute terms, the highest level of growth was seen on London’s New Bond Street where rents increased by an equivalent of $300 (USD) , which represents a 13% YOY uplift. Broad positive rental growth across western and southern Europe reflected strong tourism inflows in an Olympic Games year and increased tourist numbers, especially from the U.S. Only two of the 57 European locations analysed saw YOY rental decline albeit relatively modest: Kalku Street in Riga (-3%) and Ilica Street in Zagreb (-7%).
Americas
Miami’s Design District led Americas rental growth at over 66% YOY and 150% over the past four years. Such rapid growth reflects high demand from designer brands, world class restaurants and art installations all keen to secure space in a precinct that continues to drive ongoing interest from occupiers and developers alike. Conditions were more subdued in New York, San Francisco and Washington DC where rents were flat. Most cities in Canada saw declines, reflecting lacklustre economic growth and rising unemployment, though Toronto’s Bloor Street and Calgary’s 17th Avenue bucked the trend with growth of 15% and 31% respectively.
Asia Pacific
Rents closely reflected wider macroeconomic performance within the region. India has been the strongest major economy in the world this year, and Indiranagar 100 Feet Road in Bengaluru leads the region’s rental growth at 32% YOY. Rental growth across 16 tracked Indian locations averaged a 9% increase YOY. Southeast Asian economies also performed strongly, driven in part by robust domestic consumption, which has led to rental growth of up to 7% in Jakarta and between 1% to 5% elsewhere in the sub-region. Japan surprised by defying weak growth conditions. After four stable years, rents moved higher in 2024, led by Ginza at 25% YOY, while Osaka’s Midosuji recorded 9% growth.
Outlook
Prime retail destinations have mostly successfully weathered the storm precipitated by interest rate hikes to curb inflation in 2022 and 2023, which led to a rapid increase in the cost of living, weak consumer sentiment and sluggish economic growth. Retail now stands to benefit from the gathering pace of interest rate cuts, economic recovery, easing cost of living pressures, and real wage increases.
Report author Dr. Dominic Brown, Cushman & Wakefield’s Head of International Research, said: “Increased discretionary spending among consumers will further boost the performance of prime retail destinations. How quicky and strongly that feeds through into rental growth at a market level will vary due to local nuances and market dynamics. Growth at a global and regional level was led by the U.S. this year, but every region had really strong double digit growth in certain markets – truly exceptional in some cases – and others where rents have slipped for one reason or another. However, performance at the very top end underlines that the strength of ‘prime’ continues to rise and we expect that to continue as conditions improve.”
