New York City has earned many titles over the years. Now its hallmark luxury shopping strip, Fifth Avenue, has given the city yet another superlative: the world’s most expensive shopping area.
A new report from Cushman & Wakefield ranked the most expensive shopping streets around the globe by rent. Spaces on Manhattan’s Upper Fifth Avenue strip between 49th through 60th streets topped the list, with prices starting at $2,000 per square foot. Rents for stores stayed resilient despite a 14 percent increase in rent from pre-pandemic levels. Across the US, rents have seen record highs, with retailers paying an average of 25 percent than they did before the pandemic.
Hong Kong’s Tsim Sha Tsui district, the former title holder, fell to number two on the list, as the city’s retailers saw a 41 percent decrease in rents from pre-pandemic levels. Hong Kong’s luxury shops have also struggled to recover in no small part to the country’s travel restrictions, which have discouraged shoppers from abroad. While the Chinese government has relaxed its hotel quarantine policies, foreign travelers are still subject to multiple coronavirus tests. International arrivals, meanwhile, also barred from entering any bars, restaurants and entertainment venues for the first three days of their trip.
Beyond rental rates, New York City has managed to lure shoppers back to its stores at this stage of the pandemic. That resilience, coupled with a strong US dollar, helped nudge Fifth Avenue to the top of the annual list. In Europe, results have been mixed. London, where Bond Street dropped from third place to fourth place on the rankings, is still struggling to recover from the pandemic, even as younger luxury shoppers have helped boost sales of late. EU rivals such as Milan and Paris are seeing an increase in foreign shoppers looking to take advantage of tax incentives. That dynamic helped propel Milan’s Monte Napoleone street to third place from its pre-Covid levels, while Paris’s famous Champ-Elysees rounded out the top five.
In a statement, Cushman & Wakefield waxed optimstic about their findings. “The industry has been through one of the biggest stress tests imaginable over the past few years, but best-in-class retail real estate has remained robust. While we now face new economic challenges, the conversation has shifted from pessimism to retail’s omni-channel evolution,” Robert Travers, head of EMEA Retail at Cushman & Wakefield, said in the report. “With further investment in high-quality in-store experiences and advances in omnichannel approaches, we are confident in the sector’s resilience, particularly at the luxury end and in key global destination cities.”
Whether the luxury market and its high-profile shopping districts continue to justify that optimism is an open question.