Retail rents continue to rise in Asia Pacific, despite the uncertain global economic woes, according to the latest retail marketview report from CBRE.
The CBRE Asia Pacific Prime Rental Index, which takes into account 16 markets across the region, shows that rental growth grew by 2.4 per cent quarter-on-quarter in the third quarter compared to 1.6 per cent in the second quarter.
Josh Loudoun, CBRE regional director, retail services, said the situation in the Pacific was broadly positive in light of the low vacancy in key locations and sustained demand from overseas brands.
This was particularly evident in the luxury goods segment with Louis Vuitton opening a flagship Sydney store on George Street, Chanel opening its first Queensland store and Gucci scheduled to also open a first store in the Brisbane CBD.
“While overall rental growth has eased, prime locations remain keenly sought after by international luxury and fast fashion retailers, either looking to expand or enter the region for the first time,” Loudoun said.
“We are also seeing continued prime rental growth in certain markets, specifically Melbourne, Adelaide and Auckland, largely due to tight vacancy levels. On the flipside, rental declines were recorded in the third quarter in Brisbane and Wellington as these cities continued to recover slowly from the impact of natural disasters earlier in the year.”
Melbourne retained its mantle in the third quarter as the city with the strongest rental growth across the Asia Pacific region, with year-on-year growth in prime rents of 24.6 per cent. This was attributed to a shortage of supply and the fact that rents were coming off a much lower base than other Australian locations such as Sydney.