Dubai remains the premier luxury city in the Middle East, according to Cushman & Wakefield (C&W), which has put back the emirate on the list of the world's most expensive retail areas this year.
The global real estate services company, in its survey of 326 prime locations across 62 countries, placed Dubai on the 40th position in 2012 list with annual retail rents at $153 per square feet per year. In 2011, Dubai was not featured on the list.
“The retail market saw good occupier demand for luxury shopping centres over the year, with fashion brands particularly active. Good quality retail space remains however limited and the scarcity of new supply has generally kept prime rents stable – albeit the pipeline for next year is considerable,” C&W said.
It added: “Dubai remains the premier luxury city in the country and region, with shopping centres such as Wafi, Dubai Mall and Mall of the Emirates offering a diverse range of retailers and segments. Occupier activity was still polarised, however, with the aforementioned shopping centre categories attracting significant interest, in contrast to subdued demand elsewhere.”
In Abu Dhabi, the consultancy said the Avenue at Etihad Towers saw a number of new arrivals, with retailers such as Canali, Chloe, Hermes and Salvatore Ferragamo opening their first store in the city.
Jones Lang LaSalle (JLL), in its third quarter 2012 report, said demand for premium retail space in the large malls, especially Dubai Mall and Mall of the Emirates, remains very strong and has driven both malls to expand their areas. Secondary and old malls, however, are struggling to attract demand and have seen their rents decreasing.
The global consultancy put prime retail rents at Dh436 per square feet, while secondary retail rents stood at Dh175 per square feet.
“Prime units in better performing centres are likely to see some rental growth in 2012 but this will be offset by declining rental levels in poorer performing centres,” JLL said.
HK Causeway Bay costliest
New York's Fifth Avenue, which has remained the world's most expensive retail area for consecutive 11 years, lost it coveted position to Hong Kong's Causeway Bay.
The average retail real estate rent in the Causeway Bay shopping area jumped by 34.9 per cent from a year earlier to an annual $2,630 per square foot.
Manhattan's Fifth Avenue followed with the average retail rent at $2,500 per square feet.
Average rent in Paris's Avenue des Champs-Elysees touched $1,129 per square feet taking the third place, leaving Tokyo's Ginza district in fourth place with average annual rent of $1,057 per square feet.
Within the Americas, the United States dominated the top 10 most expensive retail locations. Times Square made took the second place behind Fifth Avenue, while Madison Avenue and East 57th Street shared the third spot within the Americas.
Cushman & Wakefield said rents in Europe were strong in prime retail locations as secondary locations struggled with weak consumer sentiment.
London's New Bond Street was the second most expensive shopping area in Europe after Paris's Avenue des Champs-Elysees, with rents at $936 per square foot.
Switzerland's Bahnhofstrasse came third with rents at $854 per square foot.