The Global Retail Destinations Ranking report found that Moscow’s prime retail rents have risen by more than 25 per cent over the past 18 months, as retailers take advantage of rising consumer spend, particularly on luxury goods.
The report, unveiled last week at MAPIC’s exhibition in Cannes, ranks New York’s Fifth Avenue as the world’s premier retail destination, with rental values reaching €1,060 (£760) a sq ft (£8,150 a sq m) a year, more than 40 per cent higher than Moscow. Moscow is in second place, followed by London, Paris and Tokyo.
Europe dominates the ranking, accounting for 16 of the top 20 most expensive destinations in the world and 37 of the top 50.
Peter Gold, head of CBRE’s Europe, Middle East and Africa cross-border retail business, said: “It is not only local retailers that are driving up rents. We are seeing premium global retailers, particularly in the fashion sector, aggressively expanding their footprint across Europe. With prime locations in short supply, rents are under significant upward pressure, as retailers compete to secure the best of them.”
In western Europe, some of the strongest rental growth is in Barcelona and Madrid, with increases of 36 per cent and 32 per cent respectively over the past 18 months. Prime rents in Dublin, which sits at seventh place in the global ranking, rose 18 per cent over the period.
In central and eastern European (CEE) markets, consumer spend is increasing at 4 per cent to 6 per cent, encouraging retailers into the market. Rents have been rising in the region, with retailers competing to secure the best space in new shopping centres. In a separate CBRE survey of 225 cross-border global retailers, 62 per cent of those surveyed now have a presence in CEE.
Gold said: “While rents in CEE may look high, they need to be viewed in the context of other factors, such as significantly lower staffing costs.
The growth potential in CEE is phenomenal for both new entrants and those that have established a beachhead in one market to expand their footprint into other countries.”
The Global Retail Destinations Ranking grades 85 retail markets across Europe, the Middle East and Africa, Asia Pacific and The Americas in terms of rental value in prime retail destinations.
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