Colliers International, 2009-05-14
by Kristin Sandlon
Boston, MA
On the cusp of the International Council of Shopping Centers’ (ICSC’s) RECon retail real estate conference (May 17-20 in Las Vegas), Colliers International, the global real estate services firm, today issued its Spring 2009 Retail Report. Per Colliers’ report, even though the apparent stabilization of the stock market has provided a bit of hope that the worst of the recession is behind us, the fact remains that significant pain is still in store for the retail sector.
Shopping center owners, investors and tenants alike have fallen victim to a severe reduction in retail spending, leaving store space vacant and same-store sales well below levels seen in recent years. Retailers have shown little interest in opening new outlets, and are instead waiting on the sidelines for economic conditions to improve and for a visible uptick on the jobs front.
In the meantime, a perfect storm has developed for retailers. The shrinking consumer dollar has essentially left the retail real estate marketplace overbuilt, and as a result, the retail sector is in the midst of one of the greatest contractions experienced in decades.
Top-line findings from Colliers International’s Spring 2009 Retail Report Follow. To view and download the full report, please visit Colliers North America Retail Real Estate Highlights - Spring 2009
· Most chains will continue the trend of shuttering underperforming locations that began in 2008; indeed, retailers closed more stores than they opened last year, and will do likewise in 2009
· This fallout could spread to otherwise well-run retailers due to plunging sales
· Urban retail continues to outperform suburban retail, but even rents in the most fashionable urban shopping districts have been on a downward trend
· A number of markets now have retail vacancy clocking in above 12 percent
· The strongest U.S. markets (vacancy-wise) share a common characteristic: development in these markets has been curtailed in recent years due to a lack of available land
· In terms of occupancy growth, 36 of the top 42 U.S. markets recorded negative net absorption during Q1 2009
· Neighborhood and community shopping centers are currently the most stable shopping center format
· The collapse of anchor and junior anchor space users such as Mervyn’s, Goody’s and Circuit City sent vacancies sharply higher for regional malls and power centers
· As for construction, developers are quickly putting projects on hold
· Rents are, unsurprisingly, trending downward
· General Growth Properties is the specter keeping landlords up at night. Large debt load coupled with inability to refinance equals massive worries for landlords
· Retail REITs are facing one of the toughest environments ever, and will also look toward dispositions to raise capital
"On the bright side, this economy has not been without some winners," remarked Ross Moore, executive vice president of market & economic research for Colliers International. "Discounters such as Wal-Mart have been recording same-store sale increases, and drug stores have been one of the most active retail categories in recent years. Survival will be the name of the game in 2009, and even for stronger players, the emphasis will shift from store openings and expansion to streamlining operations. Contraction may be the harsh reality for most, but the strongest concepts will prevail, not only from the elimination of competition, but from the best tenant’s market in decades."
STREETS OF GOLD (US Dollar/ Per Square Foot/ Per Year)
CITY
|
STREET
|
2009 - RENT (USD/SF/YEAR)
|
2008 - RENT (USD/SF/YEAR)
|
New York
|
Fifth Avenue
|
1,400.00
|
1650.00
|
Paris
|
Champs Elysées
|
859.00
|
1468.00
|
New York
|
Madison Avenue
|
750.00
|
1100.00
|
London
|
Bond Street
|
726.00
|
1393.00
|
Tokyo
|
Ginza-Chuo Avenue
|
694.00
|
678.00
|
Dublin
|
Grafton Street
|
656.00
|
954.00
|
Milan
|
Quadrilatero della Moda
|
614.00
|
-
|
Zurich
|
Bahnhofstrasse
|
566.00
|
615.00
|
London
|
Oxford Street
|
529.00
|
878.00
|
Vienna
|
Graben/Kohlmarkt
|
515.00
|
617.00
|
Stuttgart
|
Königstrasse
|
451.00
|
476.00
|
Berlin
|
Alexanderplatz
|
442.00
|
-
|
Munich
|
Kaufinger Str. / Neuhauser Str.
|
442.00
|
493.00
|
Athens
|
Ermou Street
|
412.00
|
493.00
|
Los Angeles
|
Rodeo Drive
|
400.00
|
540.00
|
San Francisco
|
Union Square
|
400.00
|
490.00
|
Brisbane
|
Queen Street Mall
|
382.00
|
510.00
|
Hamburg
|
Spitaler Strasse
|
368.00
|
440.00
|
Milan
|
Via Dante
|
368.00
|
-
|
Geneva
|
Rue du Rhône
|
364.00
|
467.00
|
Honolulu
|
Kalakaua Avenue
|
360.00
|
360.00
|
Moscow
|
Tverskaya
|
349.00
|
765.00
|
Melbourne
|
Bourke Street Mall
|
334.00
|
446.00
|
Sydney
|
Pitt Street Mall
|
334.00
|
446.00
|
Düsseldorf
|
Königsallee
|
331.00
|
352.00
|
Copenhagen
|
Strøget
|
329.00
|
-
|
Singapore
|
Orchard Road
|
324.00
|
367.00
|
Rome
|
Via Condotti
|
307.00
|
367.00
|
Belgrade
|
Kneza Mihaila Street
|
295.00
|
352.00
|
Madrid
|
Preciados
|
295.00
|
335.00
|
Prague
|
Na Prikope
|
265.00
|
388.00
|
Amsterdam
|
Kalverstraat
|
264.00
|
316.00
|
Glasgow
|
Buchanan Street
|
264.00
|
-
|
Manchester
|
Market Street
|
257.00
|
370.00
|
Chicago
|
Michigan Avenue, North
|
250.00
|
250.00
|
Shanghai
|
Nanjing Road West
|
245.00
|
-
|
Montreal
|
Ste-Catherine
|
240.00
|
300.00
|
Edinburgh
|
Princes Street
|
237.00
|
-
|
Leeds
|
Commercial Street/Briggate
|
237.00
|
370.00
|
Delhi
|
Khan Market
|
230.00
|
-
|
Helsinki
|
Aleksanterinkatu
|
228.00
|
264.00
|
Perth
|
Hay Street and Murray Street Malls
|
227.00
|
276.00
|
Toronto
|
Bloor Street
|
224.00
|
260.00
|
St. Petersburg
|
Nevsky Prospect
|
223.00
|
705.00
|
Istanbul
|
Abdi İpekçi
|
223.00
|
335.00
|
Zagreb
|
Ilica Street
|
221.00
|
264.00
|
Budapest
|
Váci utca
|
221.00
|
282.00
|
Kyiv
|
Khreschatyk Street
|
201.00
|
468.00
|
Beijing
|
Mall at CWTC
|
196.00
|
156.00
|
Vancouver
|
Robson Street
|
192.00
|
210.00
|
Boston
|
Newbury Street
|
185.00
|
185.00
|
Sofia
|
Vitosha
|
177.00
|
230.00
|
Adelaide
|
Rundle Mall
|
175.00
|
191.00
|
Stockholm
|
Biblioteksgatan
|
167.00
|
235.00
|
Eindhoven
|
Demer
|
166.00
|
-
|
Bucharest
|
Magheru, Victoriei Blvds
|
162.00
|
282.00
|
Rotterdam
|
Lijnbaan
|
160.00
|
-
|
Oslo
|
Bogstadveien
|
159.00
|
-
|
The Hague
|
Spuistraat
|
153.00
|
-
|
Utrecht
|
Oude Gracht
|
153.00
|
-
|
Warsaw
|
Nowy Swiat
|
147.00
|
159.00
|
Las Vegas
|
Las Vegas Boulevard
|
140.00
|
140.00
|
Washington
|
M Street, NW
|
140.00
|
145.00
|
Ho Chi Minh City
|
Dong Khoi Street/Le Loi Street
|
139.00
|
-
|
Wellington
|
Lambton Quay
|
136.00
|
162.00
|
Bristol
|
Broadmead
|
132.00
|
-
|
Podgorica
|
Street of Freedom
|
125.00
|
106.00
|
Bogata
|
Andino
|
125.00
|
156.00
|
Philadelphia
|
Walnut Street
|
120.00
|
120.00
|
West Palm Beach
|
Worth Avenue
|
120.00
|
-
|
Buenos Aires
|
Peatonal Florida
|
116.00
|
120.00
|
Hong Kong
|
Russell Street, Causeway Bay
|
111.00
|
-
|
Lisbon
|
Avenida da Liberdade
|
110.00
|
-
|
Dubai
|
Sheikh Zayed Road
|
110.00
|
71.00
|
Abu Dhabi
|
Hamdan Street
|
103.00
|
-
|
Houston
|
Westheimer
|
100.00
|
120.00
|
Auckland
|
Queen Street
|
94.00
|
148.00
|
Miami
|
Lincoln Road
|
94.00
|
130.00
|
São Paulo
|
Oscar Freire
|
87.00
|
89.00
|
San Diego
|
Prospect/Girard
|
87.00
|
100.00
|
Tel Aviv
|
Ibn Gvirol
|
85.00
|
89.00
|
Calgary
|
17th Avenue SW
|
80.00
|
100.00
|
San Jose/Silicon Valley
|
Santana Row
|
80.00
|
100.00
|
Dallas/Ft. Worth
|
Mockingbird Lane / Preston Road
|
70.00
|
70.00
|
Lima
|
Jirón de La Unión
|
67.00
|
-
|
Bratislava
|
Michalská
|
66.00
|
-
|
Walnut Creek
|
Mt. Diablo Blvd/Broadway Plaza
|
60.00
|
-
|
Tirana
|
Myslym Shyri
|
59.00
|
70.00
|
Vilnius
|
Didzioji St.
|
59.00
|
123.00
|
Bangalore
|
Brigade Road
|
58.00
|
97.00
|
Mexico City
|
Mazaryk
|
56.00
|
78.00
|
Tampa
|
Dale Mabry Hwy
|
55.00
|
-
|
Atlanta
|
Peachtree Street
|
50.00
|
50.00
|
Tallinn
|
Viru Street
|
49.00
|
88.00
|
Riyadh
|
King Fahad Road
|
48.00
|
-
|
Santiago
|
Alonso de Córdova
|
48.00
|
-
|
Hartford
|
Memorial Drive, West Hartford
|
48.00
|
-
|
Charleston
|
King Street
|
45.00
|
50.00
|
Columbus
|
Easton Town Center
|
45.00
|
45.00
|
St. Louis
|
Brentwood
|
45.00
|
51.00
|
Kaunas
|
Laisves Alley
|
44.00
|
62.00
|
Phoenix
|
Kierland/Scottsdale Road
|
43.00
|
45.00
|
Denver
|
2nd Avenue - Cherry Creek North
|
42.00
|
55.00
|
Cape Town
|
St Georges Mall
|
40.00
|
36.00
|
Durban
|
West Street
|
40.00
|
48.00
|
Cincinnati
|
Kenwood
|
40.00
|
40.00
|
Seattle
|
5th Avenue
|
40.00
|
41.00
|
Christchurch
|
Cashel street
|
39.00
|
59.00
|
Halifax
|
Spring Garden Road
|
38.00
|
45.00
|
Ft. Lauderdale
|
Las Olas Boulevard
|
38.00
|
40.00
|
Nashville
|
Hillsboro Pike
|
38.00
|
40.00
|
Riga
|
Kr. Barona Street
|
37.00
|
163.00
|
Klaipeda
|
H.Manto St.
|
37.00
|
44.00
|
Greenville
|
Woodruff Road
|
37.00
|
31.00
|
Stockton
|
Pacific Ave
|
36.00
|
42.00
|
Cleveland
|
Cedar Road
|
35.00
|
40.00
|
Kansas City
|
JC Nichols Parkway
|
35.00
|
45.00
|
Milwaukee
|
Bluemound Road
|
35.00
|
35.00
|
Orlando
|
Sand Lake Corridor
|
34.00
|
35.00
|
Reno
|
South Virginia Street
|
33.00
|
42.00
|
Sacramento
|
Galleria Boulevard Roseville
|
32.00
|
33.00
|
Edmonton
|
Whyte Avenue
|
30.00
|
38.00
|
Bakersfield
|
Ming Avenue
|
30.00
|
36.00
|
Minneapolis
|
50th and France
|
30.00
|
38.00
|
Pretoria
|
"City Center"
|
29.00
|
-
|
Saskatoon
|
21st St. E.
|
22.00
|
28.00
|
Boise
|
Milwaukee Street
|
22.00
|
40.00
|
Johannesburg
|
Pretoria
|
21.00
|
27.00
|
Indianapolis
|
82nd Street
|
20.00
|
24.00
|
Columbia
|
Devine Street
|
18.00
|
15.00
|
About Colliers International
Colliers International is a global affiliation of independently owned commercial real estate firms. The organization's 12,700 employees span the world in 294 offices in 61 countries. On a worldwide basis, Colliers manages 1.1 billion square feet, and has revenue of $US 1.6 billion.
Contact Information
Carolyn Sidor
Executive Vice President, U.S. Operations
carolyn.sidor@colliers.com
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