Hong Kong has not only lost its crown for having the most expensive retail district globally, the Chinese territory’s top-end shopping has also migrated to unfashionable Kowloon.
The latest Cushman & Wakefield survey of main streets shows Manhattan’s Upper Fifth Avenue has regained its spot as the most expensive street globally for leasing luxury shop space, after ceding that honour to Hong Kong four years ago.
Average annual rents on the avenue are $2,000 per square foot, a year-on-year rise of 7 percent and a rise of 14 percent compared with pre-pandemic levels.
Tsim Sha Tsui finished in second place, with annual rents of $1,436 per square foot, which is a 5 percent decline year on year and 41 percent less than pre-pandemic levels.
This year’s report shows Tsim Sha Tsui topping Hong Kong luxury rents for the first time ever. The most recent survey in 2019 put Causeway Bay on Hong Kong Island in first place. In 2018, Causeway Bay displaced Upper Fifth Avenue for the top spot for the first time in five years.
“Tsim Sha Tsui has replaced Causeway Bay as the most expensive shopping street in Asia Pacific since 2020, and continued to be the region’s top in 2022,” said Kevin Lam, Cushman & Wakefield’s executive director and Hong Kong head of retail services.
“However, it is worth noting that currently the mainland tourist arrivals in Hong Kong are still at a very low level, making vacant shops prevailing in the traditional tourist districts such as Tsim Sha Tsui and Causeway Bay.”
Rents in traditional Hong Kong tourist districts have fallen during the pandemic, with former title holder Causeway Bay dipping 7 percent year on year. “Overall, the average retail rent in Hong Kong’s prime districts recorded a drop of up to 49 percent compared with the pre-pandemic level,” Lam noted.
Luxury Strip Transformed
Lam said Causeway Bay has been gradually transforming with more shops catering to local spending. Meanwhile, he added, some international luxury brands have moved out of Tsim Sha Tsui and have been replaced by more affordable marques.
Cushman & Wakefield said the average rent in the world’s major retail markets has recovered to 6 percent below the pre-pandemic level, according to data from the third quarter of this year. Although Asia Pacific was more affected by the pandemic, rent has recovered slightly from the lowest level and is currently 12 percent below pre-pandemic levels.
Other Asia Pacific retail districts in Cushman and Wakefield’s top 10 are Tokyo’s Ginza (sixth, at $945 per square foot per year), Pitt Street Mall in Sydney (eighth at $723), Seoul’s Myeongdong (ninth at $567) and West Nanjing Road in Shanghai (10th at $496).
Cushman & Wakefield’s Main Streets Across the World report, first launched in 1988, tracks the top retail streets across 92 cities and ranks the most expensive by prime rental value using the agent’s proprietary data. The survey skipped 2020 and 2021 due to the pandemic.
Milan’s Via Monte Napoleone ranked third in the global survey, followed by London’s New Bond Street. Paris’s iconic Avenue des Champs Élysées rounded out the top five. The Bahnhofstrasse in Zurich ranked seventh.