Global Retail Rent Growth 2014

Rents for retail spaces around San Francisco’s Union Square have increased at the fastest pace of all prime retail areas across the globe over the past year, up 30 percent to an average of $650 per square-foot per year, according to Cushman & Wakefield’s latest Main Streets Across the World report.

That being said, the average Union Square rent doesn’t come close to cracking the global list of top 10 most expensive retail locations, much less the top 25, atop which New York’s Upper Fifth Avenue now sits with an average retail rent of $3,500 per square-foot per year, up 13 percent over the past year and overtaking Hong Kong’s Causeway Bay, the average retail rent for which dropped 7 percent to $2,735 per square-foot per year.

Top 10 Most Expensive Retail Locations 2014

The average retail rental growth for the top 330 shopping destinations across the globe rose by 2.4 percent over the past twelve months, up 7.5 percent in North America to $429 per square-foot per year.

And in the Americas, Union Square is the sixth most expensive retail location, behind four areas in New York and Rodeo Drive in Beverly Hills.

Top 10 Most Expensive Retail Areas in the Americas

Comments from Plugged-In Readers

  1. Posted by Live Smart

    These charts tell me more about global centers of potential growth. I know about San Francisco’s Union Square and have seen high end retailers come and go. Ditto with London’s Oxford Street for shopping. I am not surprised Istanbul, Turkey has so much potential. For centuries, it was the main trade city for Asia and Europe in the region. Size-wise I am sure all of these international shopping districts are much larger than SF’s Union Square. Per capita income of inhabitants of these cities and San Francisco varies highly. Second chart proves the theory SF’s Union Square doesn’t come close to being a world class shopping experience. Hence, you have the rush of hamburger and coffee to prime location like the Castro district.

  2. Posted by Joseph A

    Weird way to present the information ,,

    What the article does show is that in the US the 4 most expensive Retail areas are in NY , ( Upper & Lower 5th Ave, Madison Ave, & Times Square) not a surprise give that NY NY is 10 times the size of San Francisco in area and population ,,

    What is a bit of a surprise is that Union Square now nearly equals the rates of Rodeo Drive , and that Post Street is actually # 7 just barely beating out Michigan Ave in Chicago ,

    What it means though is that retail is very strong in San Francisco , which in theory is good for the City , and for development opportunities

  3. Posted by AnonA

    I’m glad I’m not alone in thinking that what the information really shows is how supreme New York City is as a “world class city” ( a phrase often floated around here when the so-called importance of San Francisco on the world economic stage is discussed). New York, London, Tokyo, Hong Kong and Paris operate on a whole different plane of economic reality than our very small city. Here is to hoping some better retail venues are now attracted to Union Square now that the demand appears to be so much greater.

    • Posted by Anon

      New York and London are Alpha ++, Tokyo, Hong Kong and Paris Alpha+, and SF Alpha. All world class, or Global Cities.

      • Posted by Anonandon

        @Anon, that link shows Chicago far ahead of San Francisco (which on that list means the San Francisco Bay Region) both economically and “globally”. How could that be? Surely there is more economic power and fortune 500 companies in the Bay Area than the Chicago region? I would have thought we were #3 after NYC and L.A.

        • Posted by Anon

          naah. That’s right. The Chicago region is nearly 9.9M. The Bay Area is 7M.

        • Posted by spencer

          chicago is much bigger on the world stage than us and so is DC

          We are in the group with Boston and Seattle.

          • Posted by Anon

            Incorrect. SF is Alpha, Boston Alpha – , and Seattle Beta.

          • Posted by spencer

            totally subjective. IMHO, we are much closer to Seattle and Boston than to LA, NY, Chicago, DC on the world stage. Although the tech boom is helping us get there.

          • Posted by Anon

            What’s totally subjective, your opinion? of course it is. The Global Cities Index? no, it isn’t. It’s a published study with established criteria.

          • Posted by spencer

            yes, its amazingly difficult to get a paper published. of course my opinion is subjective and so is their criteria.

          • Posted by Anon

            “yes, its amazingly difficult to get a paper published.”

            Actually, they are expert panels and the establishment, and then repeated use, of fixed criteria would be the very difference between the objective and the subjective when it comes to publishing. But obviously you don’t care and just wish to be snide.

          • Posted by spencer

            Boston is at #21, which is ahead of San Francisco at #22 on the world’s citiites ranking on the website. Both are A-

          • Posted by spencer

            Boston ranked higher than SF on all the subscales too.

          • Posted by spencer

            Atlanta also A- with SF and Boston.

            so NY DC LA and Chicago are the 1st tier. and Boston, SF and Atlanta in a tier together

          • Posted by Anon

            yeah, alpha – . I didn’t see that bracket.

  4. Posted by paul hwang

    Very interesting. Where can I get a copy of this report?

    • Posted by Anon

      Characteristics

      Although what constitutes a world city is still subject to debate, standard characteristics of world cities are: A variety of international financial services, notably in finance, insurance, real estate, banking, accountancy, and marketing
      Headquarters of several multinational corporations
      The existence of financial headquarters, a stock exchange and major financial institutions
      Domination of the trade and economy of a large surrounding area
      Major manufacturing centres with port and container facilities
      Considerable decision-making power on a daily basis and at a global level
      Centres of new ideas and innovation in business, economics, culture and politics
      Centres of media and communications for global networks
      Dominance of the national region with great international significance
      High percentage of residents employed in the services sector and information sector
      High-quality educational institutions, including renowned universities, international student attendance and research facilities
      Multi-functional infrastructure offering some of the best legal, medical and entertainment facilities in the country

  5. Posted by T Hui

    I know San Francisco and the Bay Area isn’t on the level of New York, London, Tokyo, or Paris in global economic importance, but SF and the Bay Area is still ranked somewhere in the top 15 to 20 in the world in GDP for a metropolitian area. In general, it is still one of the most important metro regions in the world given all the famous high tech companies are based here. And SF is always ranked as one of the top tourists destinations in the world with a high ranking in many polles as a top 10 to 20 financial center of the world as well. It also has one of the most expensive office markets in the world. That tells u something. Globally, SF is more well known than Chicago. I have found out that there are more foreigners traveling to SF than Chicago or DC. In retail, it is a primere shopping destination within the US cause Union Square has some of the most expensive rents in the US. It just can’t compete with the likes of NY, London, Tokyo, Paris, or Hong Kong. But, it is great in its own way and beats out lots of cities for sure.

    • Posted by anon2

      Don’t forget Los Angeles, which has a much larger and more diverse economy and a larger amount of tourists also. I find it curious how San Franciscans are always comparing our city to New York or London, when the real West Coast giant that is a true world city is only 450 miles south. Some may like the Bay Area better, but it is hard to ignore that Los Angeles is more of a top ten world city in its importance.

      • Posted by anon

        True, but while LA’s economy has been stagnating for nearly 20 years, the gap has been narrowing simply because of crazy higher productivity in the Bay Area. The difference in per capita GDP between the two regions is STAGGERING. LA should have a GDP of nearly three times that of the Bay Area based on the population, but is not even twice as big. It’s an absolute embarrassment for California that we’ve managed to let LA stagnate so badly.

      • Posted by anon2

        Are you including Orange County in this “embarrassment”? The Wikipedia list of world Alpha economic regions speaks for itself, and I would not call the Los Angeles region (which includes Orange County) an “embarrassment”. We just rented an office in a new tower in Newport Beach and I was more than surprised at how many of our project architects are trying their best to get relocated down there. I happen to love the Bay Area, but I locked in to a home in the Marina over 20 years ago, but why wouldn’t a younger staff member prefer a cottage in Laguna Beach to a SOMA condo which is about the same price? For what I could sell my home for, I could live on the waterfront on parts of Newport Bay…which is very attractive as I would love to have a slip for a sailboat outside my door, and I do not work in Tech and could care less where Twitter or Dropbox are located.

        • Posted by anon

          Of course, I’m talking about CSA to CSA. Per capita GDP and income for the LA CSA vs the SF CSA is an embarrassment.

          You’re now switching to something that absolutely confirms the embarrassment – how cheap property is in LA compared to SF. That’s because of the much lower incomes.

          • Posted by anon

            To clarify – the LA CSA is Los Angeles, Orange, Ventura, San Bernardino, and Riverside counties and the SF CSA is Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, Sonoma, San Joaquin, Santa Cruz, and San Benito counties.

            Of course, if we just look at the central counties of each the scales tip even more towards the Bay Area, as much of LA county is astoundingly unproductive (low income) compared to the inner Bay Area.

  6. Posted by T Hui

    Well, the only reason why LA has a larger economy is cause they have a population region that is over twice the population of the Bay Area. GDP per capita wise, the Bay Area is quite a bit higher. I don’t know if LA has a much more diverse economy. In entertainment, media, shipping, manufactuering, and areospace, yeah they lead. But in tech, finance, theater, and some part of the arts industry, the Bay Area wins.

  7. Posted by Anon

    I don’t think you can make a case for SF leading in any part of the arts industry. But it’s true that LA is a much, much larger geographical region than the Bay Area. I think it’s the largest metropolitan region in the country, in terms of square footage. And lots of that is sparse. Honestly, apples and oranges. Why people like to compare the two so very much is always a head scratcher.

    • Posted by Anon

      Believe it or not, I remember someone posting on this site that the L.A. Metro area has a much greater population density than the Bay Area. The old stereotypes from the 1980s about Los Angeles no longer apply. They have and are building subways, there are tons of walkable neighborhood centers being developed ( our firm has worked on a project in “old town” Pasadena, and is now part of the design for a new core shopping district for Pacific Pallisades, and to compare our “arts” scene to Los Angeles is just ridiculous.

      We love to claim Los Angeles is all about sprawl, but in reality, San Francisco is part of a HUGE sprawling area with the MAJORITY of the population living over 30 miles south of us. Like Los Angeles, we are a multi-center metro region, unlike Chicago, New York, Paris or whatever urban flavor we wish we were.

      For the record, I love and prefer San Francisco, but I am not blind to how small this city is, and how many issues we have that need correcting.

      • Posted by anon

        LA’s CSA does have a higher population density than the Bay Area’s CSA, because the suburbs there are so dense (and there’s immense overcrowding in immigrant hotspots like Santa Ana. It’s still more sprawly though, it’s just denser sprawl. Better than low density sprawl, but not as good as good urban density (which both areas lack in).

        And btw, you’re completely incorrect that the majority of Bay Area population is 30 miles south of SF, no idea where you’re getting that from. The center of the Bay Area’s population is somewhere in the inner east Bay, probably around Berkeley. San Jose may be the biggest municipality and Santa Clara the biggest county, but less than 25% of overall Bay Area population lives 30 miles south of SF.

        • Posted by anon2

          I would interested in any source showing where the center of population for our region is. I had always heard it was just north of San Jose, but not too far north.

          • Posted by anon

            How could that possibly be true? Santa Clara County has fewer than two million people, the region has nearly eight.

          • Posted by Jake

            KPIX did a story some years ago and their demographer said the 9-county bay area population center was in Castro Valley (video at namelink). The SF CSA is 12 counties and the additional ones would move it further east (includes Stockton).
            For either set of counties, the population center is most likely in Alameda County. FWIW, Hayward/Castro Valley are just south of SF and north of SFO and also about in a line due north of hwy 85 in the valley.

  8. Posted by Anon

    square miles, that was

  9. Posted by Beatrice Plotter

    My simple head is reeling from all of these acronyms and these latest comparisons. Stop comparing — there is no comparison. There is only one SF, and only one LA (thank goodness), one NYC, one London, one Tokyo, etc. Nothing stops us from incorporating the best things found in each of these cities as long as it works. Duplicating them is ridiculous because it is just easier to fly over and enjoy these other cities. Only when you traveled the world can you truly appreciate being home in SF.

    • Posted by anon

      To incorporate the “best” from each, you pretty have to compare each, in order to determine the best.

  10. Posted by T Hui

    In terms of the Arts, SF beats LA in Opera, Ballet, and the theater industry. Anyway, I have found the Metro GDP rankings for the US. If u combine the SF and San Jose metro GDP, it would be close to $600 billion.

    • Posted by Anon

      no, LA has better theater, and it is much more varied as well.

  11. Posted by gone on

    LA leads in best of everything — theater ,movies, delis, restaurants, surfing, musicals, babes, entertainment, cafes — everything — including crap and every food served “on a stick” due totheir superior populations numbers. But don’t worry, the Bay Area is catching up ( I can’t wait for the coolest valencia street food truck serving crispy pig ears on a stick). Enjoy

  12. Posted by Beatrice Plotter

    Who the heck wants to live in LA? If you like to, be my guest. More power to you. I rather go travel on the new high speed train route linking mainland China through Central Asia dubbed the new “Silk Road Trade Route.” I always wanted to travel the old Silk Road but didn’t get a chance to. Some many experiences left on my bucket list, so little time.

    • Posted by Anon

      So, you’re telling everybody that if you had your druthers, you’d prefer to travel along the new Silk Road than live in Los Angeles. Duly noted + huh?

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