Pitt Street rent growth outpaces global rivals
Sydney’s Pitt Street Mall has retained its title of the seventh most expensive retail street globally, lifted by the introduction of new retail concepts and higher footfall, according to research from Cushman and Wakefield.
The 2019 Main Streets Across the World report found that Pitt Street saw rent reach $16,500 during June of 2019, a 17.9 per cent increase over last year – a faster growth rate than any other location on the top 10.
“Pitt Street Mall continues to hold its place among the most popular retail destinations worldwide,” said Matt Hudson, Cushman & Wakefield national director of retail leasing for Australia and New Zealand.
“Rents in Sydney’s retail core have reached new highs as retailers focus on evolving the customer experience and trialling new store formats to attract shoppers.
“For example, we recently saw Aesop introduce an amphitheatre for customers within their new global flagship store which set a new record for retail rents on Pitt Street Mall.”
And while footfall is increasing throughout the retail precinct, space on Pitt Street is becoming more and more contested, with high-end luxury and fashion retailers vie for space along George and King Street.
“As a result, we’ve seen rents almost double along George Street as it opens up for business following the completion of the light rail. This has also presented an opportunity for landlords to reposition their sites.”
Other areas of Sydney have seen fairly stable rents, as retail conditions remain challenging, as lower footfall and online competition continuing to be a problem.
Hong Kong still top, but protests taking their toll
Causeway Bay in Hong Kong remains as the most expensive retail strip in the world, though the recent protests are beginning to impact the Hong Kong retail market.
“The Hong Kong retail market has come under pressure from recent challenges, and this has led to a sharp drop in Tourist arrivals and retail sales,” said James Shepherd, Cushman & Wakefield head of research for APAC.
“There have also been some interruptions to retailer operations. Emerging data suggests that retail rents are now reacting and appear to be falling across all submarkets.
“The outlook for the remainder of the year is muted, and many retailers appear to be taking a very cautious stance.”
However, Shepherd said some of the more entrenched retailers are seeing this as an opportunity to return to the high street with reduced rents, and could signal a revised strip in future.
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