Residents of the smarter parts of New York can once again brag or moan of being near the most expensive shopping destinations on the planet, a survey shows.

Residents of the smarter parts of New York can now brag or moan of being near the most expensive shopping destinations on the planet, a survey shows.

A survey by global real estate advisor Cushman & Wakefield, entitled Main Streets Across the World, shows that rents in the Big Apple’s Upper Fifth Avenue hit a record $3,500 per sq ft per year as it leapfrogged Causeway Bay in Hong Kong, which saw rents fall by 6.8 per cent, to secure top spot. The report ranks the most expensive locations in the top 330 shopping destinations across 65 countries.

Those cities’ figures compare with an average rise in prime retail rents of 2.4 per cent in the 12 months to September 2014, with recovery being sustained but at an overall slower rate. Volatile and somewhat subdued economic activity affected some markets, while structural changes impacted on others. However, despite a more constrained rental growth rate, 277 of the 330 locations surveyed were either static or increased over the year, the report said.

Such data highlights how these major cities, battling to stay ahead as financial centers, also seek to keep an edge in other sectors, such as retail, entertainment and leisure. The badge of being the most expensive city is not always cherished – high prices for residential property, for example, are a political flashpoint in parts of the world.

Despite seeing no change to rental values after a 40 per cent rise last year, Champs-Élysées in Paris retained its third place in the global rankings, which was followed by London’s New Bond Street in fourth where rents rose by 4.2 per cent. Pitt Street Mall in Sydney completed the top five, with the location surging up three places as it recorded an increase of 25 per cent on the back of a several international retailers taking up large units in the last six months.

The Americas yet again led the way as prime rental values surged ahead by 5.8 per cent, an identical rate to that recorded in 2012/2013. The US and Mexico were the main catalysts behind this expansion, while Brazil acted as a drag on growth.

Cushman & Wakefield’s global retail COO and head of retail in the Americas, Matt Winn, said:

“Positive economic news, combined with healthy retailer fundamentals, continued to filter through into the US retail market. Prime rents over the year to September were up an impressive 10.6 per cent on the same period last year,” said Matt Winn, the firm’s global retail chief operating officer and head of retail in the Americas.

“Indeed, strong retailer demand and robust tourist numbers continued to support expansions across the country, with gateway cities such a Los Angeles, San Francisco and New York in particular witnessing double-digit growth.  The arrival of brands such as Microsoft, which recently announced its first flagship store in New York’s Upper Fifth Avenue, further underlined the importance of these premier shopping destinations,” he added.

Asia deceleration

A slower expansion was also evident in Asia-Pacific (3.6 per cent), where the traditionally buoyant Hong Kong market was adversely affected by a decline in retail spending and lower tourism growth.

James Hawkey, head of retail in Asia-Pacific at Cushman & Wakefield, said: “In 2014, retailers showed caution expanding in Hong Kong in the face of moderating sales performance and less exuberant consumption from mainland visitors. Luxury brands were conservative, while watch and jewellery retailers notably cut back on new stores, with this sector seeing negative growth.”

“Several leading local retailers recorded lower holiday sales. The beginning of the ‘Occupy Central’ protest in Hong Kong since the end of September has further weakened the retail sentiment in major core retail areas, especially in Causeway Bay and Mong Kok where students are still blocking some major roads.”

Despite headwinds faced by local retail industry Singapore sees prime rents remain stable due to lack of supply and continued entry of international retailers.

Jocelyn Hao, director of retail, Cushman & Wakefield Singapore, added: "Singapore's retail market faces challenges this year due to government's tightening of labour market, fewer visitor arrivals following the disappearance of [Malaysia] flight MH370, continued impact of China's tourism law enacted in October 2013, that clamps down on "zero-dollar-tours", and a strong Singapore dollar.”

“The major decline of China and Indonesia tourists, who are the two largest drivers of luxury spending, contributed significantly to the lower tourist shopping expenditure in Q2, which sees a decline of 19 per cent. On the back of declining sales, lower shopper’s traffic and shortage in labour, many retailers are undergoing consolidation,” Hao said.

“Prime Orchard Road rents remains stable with a marginal increase of 1.3 per cent contributed by limited new supply of prime spaces and continued entry of international retailers who can't ignore Singapore's significance as the fashion capital in Southeast Asia,” Hao added.

Interestingly, in Moscow’s prime retail district, the rise in local currency terms was 20 per cent, although in dollars per-square-foot, at $4,749, way behind New York, at $29,882.