The retail sector is one of the most dynamic sectors of the global economy. Continuous vibrancy of lifestyle changes and there is a growing need for innovative retailing. Therefore, stores and communities across the world keep remaking their commercial areas, trying to adjust them to the needs of consumers and the market.
According to the research of commercial real estate agency Cushman & Wakefield, Sydney’s Pitt Street Mall, holds the 7th place at the list of most expensive retail areas when it comes to rental space. An average cost per square foot here is US$1000, compared with the world’s most expensive location of Upper 5th Avenue in New York at US$3000 per square foot.
Running for approximately 200 metres between Market Street and King Street, Pitt Street Mall is one of Australia's busiest and most cosmopolitan shopping precincts. Still, the retailers opening their stores here are mostly major international operators, because many domestic retailers tend to move to suburban locations. Logically, as international retailers generate higher turnovers, they are the ones able to pay higher rents at the most respectable CBD locations.
The research of Cushman & Wakefield also suggests that the future will bring more flexibility when it comes to ways of renting, so it will give the landlords more chances to secure high quality tenants. In the last three years big names in the retail industry keep securing the best locations all over the country and it is expected the trend to be continued. Such companies are Swarovski, Pandora, H&M, Zara and Uniqlo. More major brands are expected to join the list when it comes to renting the premium retail sites.
The study has revealed that the most successful sectors are cosmetics and luxury, fast fashion, and athletic wear.
With a maturing retail sector and a resurgence in inner city living, city centre streets and malls will continue to see strong retailer demand, Cushman & Wakefield noted. It is expected that one of the important factors for improving the market will be extended trading hours with shops in some cities working from 7 a.m. to 7 p.m.
Although health and beauty, fashion and lifestyle brands lead when it comes to being wanted and popular, food and beverage operators remain a key driver of demand across the region.
Pitt Street Mall recently underwent a major 10 million dollar upgrade and revitalization. It is one of the highest rent retail districts in the world with over 500 specialty stores and many large flagship stores as well.