Sydney and Melbourne both enter the world`s top 10 most expensive retail areas.
With the arrival of a large number of international brands, Sydney-based Pitt St Mall and Melbourne-based Bourke St Mall have established their positions as the most expensive locations in the world for store rentals.
Although New York`s Fifth Avenue, Paris`s Champs Elysees and Hong Kong`s Causeway Bay hold the top three places in the world, Australia`s appeal to international brands, which are willing to pay higher rents to open flagship stores, has helped it retain its place on global shopping maps.
The Cushman & Wakefield Global Shopping Street report tracks rents per unit area for 462 top shopping streets around the world.
In Sydney, the average annual rent per square meter was 13338 yuan in 2016, 6670 yuan in Melbourne and 4050 yuan in Brisbane.
In the report, Pitt St Mall ranked seventh in the world at 9383.4 euros per square meter, 8793.5 euros ahead of Myung Tung in Seoul, 8408 euros in Banhoff Avenue, Zurich, and Cole Market in Vienna, Austria.
Of course, exchange rate factors need to be taken into account in the report, including a weaker Australian dollar and a stronger yen.
Matt Hudson and Ben Tremmellen of Cushman & Wakefield`s Australian retail business say factors from tourists, especially from China, have become a part of the Australian retail industry.
They say Chinese tourists want urban areas rather than coasts, which helped CBD`s upscale high-end streets in Sydney and Melbourne, while retailers scrambled for an increase in major street stores that increased rents by 5.7% in 2016.
Hudson said international demand for high-end shopping streets not only pushed up Pitt St Mall rents, but also caused some brands to be squeezed into nearby streets because of their limited area.
"this makes Sydney`s core CBD retail area a destination for consumers, bringing people back to the city center," he said.
"Barangaroo`s new office building project, the changes in the new David Jones,George St, and the upgrading of the ring wharf will all create new business zones and increase the attractiveness of the CBD retail industry."
Wynyard Railway Station`s $1 billion redevelopment plan will also offer new commercial space in Geroge St.
Tremmellen says Melbourne is also changing as new brands, such as the UK`s Debenhams, move into the St Collins Lane mall.
"the next trend will be the cosmetics industry," he said.
"the success of Sephora and Mecca Cosmetica has prompted other brands to look for shops downtown."
