Bonifacio High Street in Taguig City landed on the 51st spot on the list of the most expensive retail locations in the world, said global real estate services firm Cushman and Wakefield in its latest report called “Main Streets Across The World.”
Bonifacio High Street is Ayala Land Inc.’s eight-year-old mixed-use development in the booming Bonifacio Global City, near retail highbrows Serendra, Market!Market!, and SM Aura.
The place has a mix of high-end retail shops, restaurants, amenities for leisure and entertainment, and some Grade A residential condominium units.
The Chicago-based Cushman & Wakefield’s global flagship report tracks over 500 of the top retail streets around the globe, ranking the most expensive in each country by their prime rental value.
The 27th such report ranked Bonifacio Global City as the 51st most expensive retail location in world, with rental rates averaging $56.4 per square feet a year.
Bonifacio High Street, it said, posted the strongest rental growth rate in Asia Pacific, rising by 24 percent year-on-year at P2,282 per square meter monthly as of June.
New York’s Upper 5th Avenue is the world’s most expensive retail street, with rents rising to $3,500 per square foot per year in 2015, nearly 50 percent more expensive than second place Causeway Bay in Hong Kong.
Cushman and Wakefield said demand in Metro Manila is fuelled by foreign brands entering or expanding in shopping malls and high streets, both of which have seen double-digit growth over the year to June 2015.
New entrants, it cited, include H&M, Old Navy, Pottery Barn, Crate and Barrel, UnderArmour, Burton, Brooks Brothers, F&F, Sfera, Shana, Paul & Shark, Pull and Bear, Casadei and Hamleys, as well as convenience stores Lawson and All Home.
The global property consultancy firm attributed the robust retail activity to healthy domestic consumption, on the back of higher income from remittances and the outsourcing business industry.
It also noted the trend among Philippine developers of moving into community mall formats, which enables them to capture latent demand in other areas of the metropolis.
Cushman and Wakefield likewise noted that although e-commerce might be gaining popularity, bricks-and-mortar stores would remain a lot more favorable to Philippine consumers.
Aside from Bonifacio High Street, Greenbelt and Power Plant Mall in Makati City, as well as Shangri-la Plaza Mall in Mandaluyong City remain to be the focus of Luxury retailers.
The global property consultancy firm does not expect the trend to change, although it said upcoming hotels in the Entertainment City in the Bay area might attract some high-end brands, as they look to set up as a new hub for new luxury brands.
Theodore Knipfing, Cushman and Wakefield head of retail for Asia Pacific, is optimistic about the future of retail trade in the region.
“The outlook for Asia’s retail market is largely positive, with retail sales growth averaging 8.5 percent over the next five years, supported by rising tourist number which is, in turn, is spurring robust and sustained retailer demand—albeit firmly focused on prime, well-located space,” Knipfling said. “Although the growth of e-commerce is notable across the region, physical stores will remain important. However, landlords will need to focus on improving the shopping environment and customer experience in order to compete for retailer demand.”
Also on the latest list of the world’s priciest retail hubs was the Avenue des Champs Elysees in Paris, France, on the third spot, with rental rates going at $1,372.1 per square feet a year.
New Bond Street in the United Kingdom and Via Montenapoleone in Milan, Italy grabbed the fourth and fifth spots, with $ 1,321.2 and US$1,035.1 per square feet a year respectively.
Cushman and Wakefield said 35 percent of its tracked 500 top retail stores around the world have shown increases in rents despite the increased global uncertainty experienced over the last 12 months.