America No Longer In Pole Position Of Most Expensive Rental Space
This significant shift took place after 10 years of New York on its lofty perch as the city in possession of the most expensive retail space in the globe. The position has been ascended to by the mega city of Hong Kong.
Real estate experts estimate that a square foot of retail space in the prime shopping areas of Hong Kong can cost as much as $ 4,500 on an annual basis. The average market rate for one square foot of office space in the city begins at around $2,500 to $3,000!
Average rentals have shot up by 35% over the last year. 10 years in the making, there are many reasons behind this slow but sure rise in office space rental costs in Hong Kong. Most of these high value retail spaces have been snatched up by global luxury brands of the likes of Sa Sa International Holdings Ltd, Salvatore Ferragamo Italia Spa, Chanel, Gucci, Christian Dior and Burberry. The demand for these designer brands is a key reason fuelling the rental boom since shoppers from all over the world flock to these stores in order to take complete advantage of the duty free prevalent in Hong Kong.
Tourists from the Chinese mainland contribute a sizeable percentage of the shopper footfalls recorded by the city. Another important factor behind the spurt in retail rental rates is the fact that Hong Kong faces an acute shortage of quality office space. This gross mismatch between demand and supply is not expected to be bridged any time soon implying that these astronomical rental rates will go up even further in the future!
Some of the most coveted spaces that command a premium in the shopping paradise are areas like Lockhart Road, Central and Tsim Sha Tsui districts, Times Square Mall and Causeway Bay. However it must be noted that Hong Kong’s hold on the crown as the city possessing the most pricey office space in the world is fragile at best. Media reports indicate that the erstwhile top gun New York can regain its preeminent position if rental charges on the elite Fifth Avenue area of the city continue to rise at present rates and the American economic recovery gathers further steam… we shall see.
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