Pitt Street Mall rents growing fastest globally
Sydney’s Pitt St Mall has been named the seventh most expensive retail precinct in the world, with rents on the famed strip growing faster than any other top ranked location.
Cushman & Wakefield’s 2019 Main Streets Across the World report found the addition of the George St light rail to the pedestrian-heavy area has helped boost demand from high-end luxury and footwear retailers looking to establish flagship sites in the heart of the CBD.
Rents rose 17.9% along Pitt St Mall over the last year, with tenants now paying average rents of $16,500 per sqm, making it Australia’s most expensive retail real estate.
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Cushman & Wakefield Australia and New Zealand’s national director of retail leasing, Matt Hudson, said the significant increase in rents had presented an opportunity for landlords to reposition their sites.
“Pitt Street Mall continues to hold its place among the most popular retail destinations worldwide. Rents in Sydney’s retail core have reached new highs as retailers focus on evolving the customer experience and trialling new store formats to attract shoppers. For example, we recently saw Aesop introduce an amphitheatre for customers within their new global flagship store which set a new record for retail rents on Pitt Street Mall.”
At $42,065 per sqm, Hong Kong’s Causeway Bay was named the most expensive retail hub in the world for the second year running. New York’s Upper 5th Ave retained second place, with rents of $34,499 per sqm. European locations rounded out the top five most expensive retail destinations, with New Bond St in London taking third at an average $26,281 per sqm, followed by The Avenue des Champs Élysées in Paris ($22,685 per sqm) and Milan’s Via Montenapoleone ($22,209 per sqm).
International luxury fashion house Valentino has committed to a tenancy within Dexus’ redeveloped MLC Center at neighbouring Sydney precinct Martin Place. The high-end store will span two levels across 765sqm on the corner of Castlereagh and King Streets and will open in the first half of 2021.
While the light rail may be helping to give Pitt St a new lease on life, other areas in Sydney continue to feel the pressure of low consumer activity.
“There is an increasing polarisation and rising pressure on incentives in many lower foot-traffic locations across Sydney. For these areas, rents are more likely to be stable rather than rising as retail conditions remain challenging and online competition continues to gather pace,” Hudson says.
Elsewhere in Australia, Melbourne’s Bourke Street Mall receives about $7000 per sqm, while Brisbane’s Queen St averages retail rents of $4,500 per sqm.
The report has tracked rents for 448 locations across 68 markets since 1988.
This article originally appeared on www.theaustralian.com.au/property.
