Cushman & Wakefield has released the 29th edition of its global flagship report, Main Streets Across the World. The report, authored by Cushman & Wakefield Research, ranks Miami’s Lincoln Road and Palm Beach’s Worth Avenue among the top 10 most expensive retail districts in the Western Hemisphere.
Main Streets Across the World tracks 451 of the top retail streets around the globe, ranking the most expensive in 68 countries by their prime rental value and enabling an analysis of trends in retail real estate performance.
Lincoln Road ($300/SF/Year) and Worth Avenue ($145/SF/Year) were ranked fifth and eighth, respectively, in terms of 2017 rent values. Worth Avenue jumped a spot from its 2016 ranking of ninth while Lincoln Road held steady as the fifth-most expensive retail market in the Americas.The top 20 retail markets in the Americas were:
Cushman & Wakefield’s Senior Director Greg Masin, based in Miami, said Lincoln Road is recognized as the city’s premier shopping district.
“As South Florida’s sole open air, pedestrian mall, Lincoln Road remains a unique shopping and entertainment experience. With its proximity to the ocean, diverse mix of flagship tenants and dining options, Lincoln Road continues to resonate with tourists and locals alike,” said Masin.
Added Masin, “As Miami and the Beaches continue to evolve as a global hospitality destination, and with the completion of the improvements to the nearby convention center, the allure of Lincoln Road, while steady, will be tested by the growth of other emerging neighborhoods in South Florida. Lincoln Road will need to up its game through a combination of municipal enhancements and thoughtful tenant additions to maintain its position as South Florida’s leading shopping destination.”
Main Streets Across the World finds e-commerce is having a significant impact on the Miami market, with Amazon planning to open an 850,000-square-foot distribution center and many retailers downsizing or closing stores altogether. However, the report also recognizes Miami traditionally fares well in challenging times due to its strength as a tourist destination and the number of foreigners with second homes who continue to spend as normal.
Miami is also benefiting from a growing population and rising employment. New development is generally focused on mixed-use, which plays to the live-work-play trend, whereby retail is included to ensure 24-hour use. Allapattah is an emerging hot spot for investors who have been priced out of Wynwood, while American Dream Miami — a 5 million-square-foot retail and entertainment complex — is planned for the junction of Interstate 75 and Miami Gardens Drive.
Further north in Palm Beach, Worth Avenue retailers are rapidly evolving their approach in response to the continued growth and ubiquity of e-commerce.
The main driver of the Palm Beach retail market along Worth Avenue is the push for retailers to reinvent their business model with the use of technology in order to enhance the customer shopping experience. Many retailers continue to reduce their footprint to cut costs, and those signing new leases are generally for shorter terms at lower rents.
The West Palm Beach market is very seasonal so it can be difficult to gauge retailer performance during the low season. While e-commerce will continue to provide strong competition for physical retail, Palm Beach has a loyal customer base that should continue to support the existing retailers for the foreseeable future.
“Established in the 1920’s on the exclusive Island of Palm Beach, Worth Avenue continues to be globally recognized as one of the most prestigious shopping destinations in America, offering the sophisticated customer a charming, old world setting for luxury shopping that the modern malls and the internet cannot offer,” said Robert Klecinsky, a Director in Cushman & Wakefield’s Retail Services group who is based in the firm’s West Palm Beach office. “Many Worth Avenue retailers have operated continually for decades in Palm Beach and offer an unusually high level of merchandise knowledge and personalized service.”
“While rents are slightly down, demand to locate to Palm Beach by the world’s top retailers — such as Chanel, Ferragamo, Graff and Escada — continues to be strong,” added Klecinsky.
Across the Americas as a whole, recent economic growth has been encouraging and looks set to remain so in 2018. However, retail real estate trends have varied across the region’s diverse set of markets, according to the report’s author, Darren Yates, Head of EMEA Retail Research, at Cushman & Wakefield.
“While the growth of online retail is a common theme in all of America’s markets, retailing in much of Latin America is still maturing. However, most of the region’s developed cities now have high quality retail developments, which cater for a variety of income groups, including a rapidly growing middle class,” said Yates.
Added Yates, “In the U.S., while there has been a lot of discussion around store closures, the main high street markets have not been as adversely affected as some of the headlines might suggest. The fact is that most retailers are not turning their backs on high street locations.”The most expensive global retail locations, by country, include:
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 45,000 employees in more than 70 countries help occupiers and investors optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. 2017 marks the 100-year anniversary of the Cushman & Wakefield brand. 100 years of taking our clients’ ideas and putting them into action. To learn more, visit www.cushwakecentennial.