Luxury retail continues to expand strongly in a number of top global markets and key Asian cities, according to a new study by Colliers International.
A increasing consumer trust level, owing in part to the fading memory of the recent global economic crisis, is one main factor driving luxury sales. (In fact, according to Nielsen's Q214 Global Consumer Confidence Survey, consumer confidence has increased in 52 percent of the markets surveyed.) Another factor driving the rise in luxury retail is the significant increase in income of the wealthiest people, which leads to a higher proclivity to spend. buy house in qatar
"Our review of the global retail real estate landscape shows what we've been seeing this year—a cautiously positive retail market that is gradually rising in many sectors, despite some hiccups of caution due to challenges to global economic growth and the shadow of e-commerce," said Anjee Solanki, Colliers International's National Director of Retail Services. "Luxury, in particular, is a big catalyst for the expansion we're seeing, even in regions like Europe and Asia where GDP growth and consumer spending are small."
The following are some other main retail findings:
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The sweet spot for luxury retailers is right now. Luxury retailers are benefiting from rising incomes among the wealthy, and they are booming in many of the world's most prestigious cities, including Paris, London, New York, and Asia's major cities. As seen below, growth in this sector is a key factor in driving expansion across the board.
In emerging economies, new supply is plentiful. The global expansion of the workforce and middle class is driving a demand for new supply, which is primarily concentrated in developing countries in Europe, the Middle East, and Asia with strong economies, stable governments, an increasing middle class, and business-friendly regulatory environments.
Threats to global economic development and the specter of e-commerce temper optimism. E-commerce is influencing both conventional and luxury retailers around the world, putting pressure on merchants to come up with more innovative space-use concepts. One common tactic is to convert stores into product showrooms in order to attract more foot traffic and increase online sales.
High-street markets are doing well, and emerging markets are developing rapidly. The economic recovery in the United States, as well as solid employment growth in many parts of the world, underpin the generally optimistic outlook.
New York's Fifth Avenue is at the top of the list of the top 10 global retail rentals for the year (per square foot in USD), followed by New York's Madison Avenue and Hong Kong's three spots. London, Milan, Moscow, Paris, and Zurich each get one place on the list (in alphabetical order, not by importance).