New Bond Street has dropped down by a place to rank fourth in the list of the world’s most expensive shopping streets, according to the latest research from Cushman & Wakefield.
Average prime rents on the street fell by 7% year-on-year to $1,361 (£1,146) per sq ft per annum.
New York’s Fifth Avenue stayed in the top spot, with rents up 7% year-on-year to an average of $2,000 per sq ft. Hong Kong’s Tsim Sha Tsui placed second, with Via Montenapoleone in Milan ranking third in the report, which tracks 92 cities.
Rents across global prime retail destinations have risen by an average of 2% during the past year. Researchers also noted rents declined by 13% on average from the peak of the Covid-19 pandemic but have since rebounded to 6% below pre-pandemic levels.
Globally, retail market rents have recouped around 50% of their losses. C&W said the majority of this improvement was seen during 2021 and early 2022, before the global markets began to feel the negative impact of economic crises.
More broadly, London retail is still operating below pre-Covid-19 rental levels, with considerable variation within the city. Rents on New Bond Street were 11% below pre-pandemic levels, while Covent Garden was 30% under.
Rents to rise by 30%
In the UK, New Bond Street remains the most expensive street for shop space, with rents more than double those of Sloane Street, the second priciest street, averaging at $607 per sq ft.
C&W said the 144 stores along Bond Street were “vastly different” in terms of performance. “While rents are often dictated by the level and quality of space on offer, as well as location, on New Bond Street it is based on who your neighbours are,” the report said.
C&W highlighted expectations for 20-30% growth in asking rents in the middle section, characterised as starting at Conduit Street and ending at Maddox Street, over the next 12 months. The report underlined this as the “up and coming” part of the area.
The jewellery quarter commanded the most expensive rents, averaging at £2,150 per sq ft. The top of the street by Oxford Street was found to be the “cheapest” and contained most of the vacant stores, although researchers said that number is now declining.
Call of Gucci
Peter Mace, head of central London retail at C&W, said Gucci’s impending move to 144-146 New Bond Street, W1, from its premises on Old Bond Street, will lead an influx of luxury retailer relocations to the area.
Looking ahead, Mace said retailers on New Bond Street were “better positioned” to defy the impacts of both inflation and consumer confidence, since luxury shoppers have been “less impacted by previous recessions”. He added that favourable exchange rates and slightly lower rents may also attract new luxury brands.
“While these headline figures suggest New Bond Street has not recovered to pre-Covid levels, deeper down there is a more complex picture,” said Mace.
“We are seeing several relocations from within the street or from luxury brands who were based nearby, many of which are looking to move to the middle section, to be close to Gucci, which is moving there next year. Gucci’s gravitational pull highlights New Bond Street’s unique dynamic where luxury brands want to keep their friends close and their competitors closer.
“It retains its position in the world’s top five most expensive shopping streets and we are confident in its further recovery over the coming months, especially with Crossrail now open.”
View lettings comparables and events on New Bond Street >>
To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews
