City of Lifts? (Photo: hongkong)
According to a report by global property consultancy Cushman & Wakefield, Hong Kong is the most expensive place in the world for shop rents.
Well, what else is new?
A lack of prime shopping space -- or just space in general, really -- and the lure of big-spending mainland tourists has driven up top rentals in key districts to over US$927 per square feet last year, said Cushman's report.
These findings come in the first global retail report from Cushman & Wakefield and the International Council of Shopping Centers, released last week. Buenos Aires in Argentina is surprisingly second on the list, where prime rents are US$500 per square feet per year. China's capital, Beijing, is third, with rents of US$404 per square feet per year.
Meanwhile, investor activity in the market saw 385 shops sold in August, according to Ricacorp Properties. Although the sales' volume was up just 7 percent from July, the total sales value was up 34 percent to HK$6.22 billion.
The report further added that the Asia-Pacific region leads Europe and the Americas in terms of rental growth for shopping centers, with rental rates increasing 2.8 percent over the past year, versus growth ranging from zero to 0.5 percent in Europe, and 0.5 per cent in the Americas.
A fast-growing consumer base, new economic policies supporting the retail sector and a growing international appeal all combined to promote Asia's strong retail performance. Cushman says this will support future expansion.
Rents in Shanghai and Beijing, which are popular entry points for international retailers, climbed to US$368 per square feet and US$404 per square feet, respectively.
James Hawkey, executive director of Cushman & Wakefield's retail services, said while the shopping centre market on the mainland was in some ways still in its infancy, it was growing fast.
"There is still strong demand from a range of fast-growing retailers and very high levels of development activity," he said.
In the Americas, Latin America has provided a bright spot, according to the report, pushed by a strong and growing middle class, which, coupled with the existing wealthy class, has "tremendous untapped spending power and high consumption rates".