Pitt Street Mall rents among highest in world
Border closures, internal lockdowns and a shift in spending habits have impacted tenants in Sydney’s Pitt Street mall in the past two years, but it is still one of the top 10 most expensive global city-based shopping strips in which to rent a store.
In terms of rent charged, Pitt Street Mall sits at number eight in the global survey, a fall of one spot.
In the Cushman & Wakefield’s flagship Main Streets Across the World report, based in Euros per square metre, Sydney’s average rent is $A11,818 per annum (€7620), which is a drop of 24 per cent. On a $US per square foot basis, and including currency movement, Sydney rent is $US723 per annum.
The survey was first launched in 1988 and tracks the top retail streets across 92 cities, and ranks the most expensive by prime rental value using Cushman & Wakefield’s data. This is the first survey since 2019 with comparative performances of the streets, pre- and post-pandemic.
In the past few years Pitt Street Mall, once dominated by fashion outlets, has undergone a significant change of focus with the arrival of a bank branch, a supermarket and a car dealership. More changes are coming, with agents looking to introduce new experience-based tenants to bring more foot traffic back to the area.
Globally, it ranks above the fashionable streets of Myeongdong in Seoul and West Nanjing Road, Shanghai. Within Asia Pacific the mall is number five behind Tokyo’s Ginza and Hong Kong’s Tsim Sha Tsui and Causeway Bay.
The head of research, Australia & New Zealand at Cushman & Wakefield, John Sears, said Pitt Street Mall’s drop in rents from before the COVID-19 pandemic was “impacted most significantly by three factors”.
These include the hard line lockdowns and border restriction that reduced foot traffic and tourism to the precinct.
“While foot traffic has improved from the lockdown lows, data from the Property Council of Australia show office occupancy in the Sydney CBD, as at October 2022, is still only less than 60 per cent of its pre-pandemic levels,” Sears said.
Sears added that rents are also converted to US dollars and Euros for the global ranking, and “over the 12 months to June 2022, the Australian dollar fell around 8 per cent compared to the US dollar”.
Melbourne’s Bourke Street is ranked 16 in the Asia Pacific survey with rents at €3355 ($A5203 per square metre per annum), a drop of 21 per cent due to the pandemic lockdowns, the impact of currency movements and also a reshuffle of tenants.
Globally, New York’s Fifth Avenue has reclaimed its position as the world’s most expensive retail street, with average rents of €21,076 per square metre per annum ($A32,684).
The Asia Pacific head of insight and analysis at Cushman and Wakefield Dr Dominic Brown said tighter closure of international borders had a more severe impact on that region’s luxury retail strips than elsewhere in the world, as seen by the steeper decline and softer rebound in regional rents.
While many markets have now either fully or partly reopened their borders, international tourism in the Asia Pacific is still down 75 per cent on 2019 levels compared to the global average of 28 per cent, and just 16 per cent in Europe.
“That being said, domestic consumption has rebounded strongly, with practically all Asia Pacific markets recording retail sales higher than before the pandemic,” Dr Brown said.
“We also know that e-commerce sales have slowed over the past year as customers have returned to physical stores.”
