Fifth Avenue retail rents most expensive in the world.

New York City's Fifth Avenue is once again No. 1 in retail rents worldwide, according Main Streets Across the World, and annual report by Cushman & Wakefield, the world's largest privately held real estate services firm.

"The hottest stretch of Fifth Avenue is north of 49th Street," said Gene Spiegelman, executive director, retail services, Cushman & Wakefield in New York. "We are seeing luxury brands being joined by the popular fast-fashion brands, all in search of global brand recognition."

The most notable addition this year to Fifth Avenue was Abercrombie & Fitch, which took over the 17,000 s/f Fendi unit at 720 Fifth Avenue, following on the heals of Zara's lease last year for its Fifth Avenue flagship store.

Abercrombie & Fitch joins the likes of Louis Vuitton, Prada, Gucci and Asprey, alongside Gap and H&M.

Main Streets Across the Worm 2005 tracks retail rents in the world's top 237 shopping locations across 47 countries around the world. The report's ranking is determined by taking the most expensive location in each of the countries monitored.

"The international race for space is continuing unabated. A growing number of global brands are vying for limited space on the pavements of the world's top shopping destinations, whether Paris's Avenue des Champs Elysees or London's New Bond Street. This in turn is pushing up rents," says Darren Yates, Cushman & Wakefield's Head of Market Analysis in Europe.

In second position is Causeway Bay in Hong Kong, which this year has leapfrogged Paris' Avenue des Champs Elysees.

"Retail rents in Hong Kong have increased sharply on the back of an improved Asia economy, an influx of tourists from the rest of China, as well as recovery in visitor numbers from Europe and North America," said James Fisher, General Manager of Cushman & Wakefield's Hong Kong office.

Of the 237 locations monitored in Main Street, only 18 show a fall in rents in local currency terms, with the remainder either seeing rents stable or growing. On a regional basis, rents increased fastest in Asia Pacifc, with Hong Kong's Causeway Bay recording 90 percent growth (No. 1 on a global level) year over year, followed by Tokyo's Ginza district, a favorite with cross-border luxury brands.

Some of the strongest rental growth has also been in Sao Paolo in Brazil, where the best shopping centers have recorded rental growth of up to 40 percent.

"A healthy consumer demand is behind the strong performance of Brazil's retail sector," said Marina Cury, Cushman & Wakefield's Head of Retail Services in South America. "In terms of the sector's expansion and modernization, shopping centers are leading the way, with cross-border retailers starting to line up to enter what is Latin America's biggest economy."

The biggest rental rises in Europe have been in Kobmagergade in the Danish capital of Copenhagen, where rents have gone up 40 percent in local currency terms. Outside the Nordic region, rents in Budapest's main Vaci utca high street, Moscow's Novy Arbat Street and London's New Bond Street have all gone up 25 percent when measured in local currency terms.

Looking forward, David Hutchings, Cushman & Wakefield's Head of Research in Europe, said: "Emerging markets such as China and India are the ones to watch as they start to dismantle barriers to foreign investment, and hence become more attractive to cross-border retailers and developers.

"In more developed markets, new developments coming on stream will not only improve the quality of retail space but also provide a greater choice for retailers and consumers."

Rank   Rank                                                  US$/sf/
2005   2004   Country         City        Location             year

 1      1     United States   New York    Fifth Ave.         1,300
 2      3     Hong Kong       Hong Kong   Causeway Bay       1,083
 3      2     France          Paris       Champs Elysees       745
 4      4     UK              London      New Bond St.         627
 5      9     Japan           Tokyo       Ginza                518
 6      5     Ireland         Dublin      Grafton Street       411
 7      8     Australia       Sydney      Pitt Street Mall     363
 8     10     Korea           Seoul       Myeongdong           354
 9      6     Germany         Munich      Kaufingerstrasse     350
10     13     Switzerland     Zurich      Bahnhofstrasse       326