A survey of the world’s most expensive retail locations by a real estate consulting firm shows that Apple stores have landed on just three of the upscale Main Streets the firm studied, allowing plenty of future opportunities for Apple’s retail operation. According to the 2010 “Main Streets Across the World” report by Cushman & Wakefield, Apple’s Fifth Avenue (USA), Ginza (Japan) and Bahnhofstrasse (Switzerland) stores represent their countries most expensive retail properties. Several other Apple stores are located near Main Streets, including Regent Street (UK, close to New Bond Street), Rosenstraße (Germany, close to Kaufingerstraße), and George Street (Australia, close to Pitt Street Mall). But Apple’s stores in Italy, Ireland, France and Canada are distant from those countries’ Main Streets. The future Apple store in Barcelona will be distant from that country’s Main Street. The Main Street of China is on East Nanjing Road, where Apple plans to open a store in 2011.
The Cushman & Wakefield study focused on retail space supply and demand, and rent trends in 59 countries. The company found that demand for space and rental rates didn’t follow regional or global economic trends during first-half 2010, but instead varied mostly according to demand. First-half 2010 rents declined in 20 countries, and only the Latin America and Asia-Pacific regions showed an increase in retail rents. Coincidentally or not, both of those regions are where Apple has been largely inactive, with the exception of Australia.
International retailer expansion is, “an increasingly important driver of the prime retail property market,” the company said, which seems to mirror Apple’s latest expansion plans. In fact, 28 of the 44 stores that opened in fiscal 2010 were outside the United States, an emphasis that Apple executives has repeatedly mentioned in financial conference calls.
CW said 2011 rents should be more stable, “and a recovery in demand and pricing may start to emerge later next year as supply levels fall back.”
Canada and the U.S. topped the list of regions for average per-square-foot retail rents, at $331 per year. Just behind are Asia-Pacific ($252), Western Europe ($244) and the Eurozone countries ($241). The Middle East ($89), Central and Eastern Europe ($100) and Latin America ($104) rank at the bottom of the retail rental list. Perhaps not coincidentally, there are no Apple stores in these low-ranked regions.
The world’s most expensive retail Main Street for first-half 2010 is Fifth Avenue (NYC), at $1,850 psf/y. Apple reportedly is paying less than $1,000 per square-foot for its iconic, glass Fifth Avenue (NYC) retail store, part of concessions by the building owner to attract Apple to the building. Rounding out the top five Main Street locations are:
- Hong Kong, Causeway Bay – average rent of $1,664 per square-foot yearly
- Japan, Ginza – $877
- UK, New Bond Street – $836
- France, Champs Elysées – $793
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