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New York Still World's Most Expensive Retail Location
New York's reign as the world's most expensive retail market continued in the third quarter (Q3) of 2009 despite a 25 percent decline in rents over the past 12 months, according to the latest CB Richard Ellis (CBRE) Global MarketView on the retail sector. Retail rents globally fell by an average of 1 percent from the second quarter to the third quarter of 2009.
Prime New York retail rents ended the quarter at $1,640 per sq. ft. per annum. Hong Kong and Paris retained their places as second and third in the global rankings, with rents of $976 per sq. ft. and $857 per sq. ft. per annum respectively.
Lower interest rates and government infrastructure spending and incentives have kept consumer spending relatively stable in the Americas but down compared to a year ago. Retail market fundamentals have weakened overall, but not to the same extent as the office and industrial sectors.
U.S. cities continue to lead the most expensive retail rents in the Americas region. Los Angeles and Chicago made the top 20 global ranking at 11th and 15th position respectively, following New York as the most expensive global market.
The region's retail vacancy rates have increased marginally, as some retailers delay expansion and undertake strategic downsizing, but generally there have not been any drastic changes to the retail property landscape in Q3 2009.