London overtakes Milan & New York in prime retail rents

London’s New Bond Street has been named the world’s most expensive retail destination for the first time, as luxury demand fuels a sharp 22 per cent surge in rents to $2,231 per square foot per year, according to Cushman & Wakefield’s 35th ‘Main Streets Across the World’ report.

The street overtook Milan’s Via Montenapoleone at $2,179 psf/yr and New York’s Upper Fifth Avenue at $2,000 psf/yr. The study ranks 141 top retail locations worldwide using proprietary rent data, spotlighting sustained resilience in the luxury corridor segment.

Global headline rents rose 4.2 per cent on average over the past year, with 58 per cent of monitored markets seeing increases. The Americas posted the sharpest regional rise at 7.9 per cent, driven by strong currency effects in South America. Europe registered 4 per cent growth, supported by London’s strong recovery and robust performance in cities such as Budapest. Asia Pacific slowed to 2.1 per cent growth, with India and Japan outperforming while Greater China and Southeast Asia faced economic pressures.

In Europe, New Bond Street led a broader uplift in London’s luxury corridors as Oxford Street and Regent Street also showed double-digit gains. Budapest’s Fashion Street was the region’s standout performer with a 33 per cent surge, overtaking Vaci utca as Hungary’s premier retail hub. Milan’s Via Montenapoleone and Paris’ Champs Elysees maintained their global prominence with stable rents of $2,179 and $1,364 psf/yr respectively.

“New Bond Street’s rental growth has been fuelled by strong demand, limited supply, and continued investment in the public realm, all of which have reinforced its status as a global retail destination,” said Duncan Gilliard, head of Central London Retail at Cushman & Wakefield.

The Americas continued to be the best-performing region. Brazil’s Oscar Freire Jardins in Sao Paulo saw the sharpest jump globally, up 65 per cent, gaining seven positions in the global rankings. In North America, the US posted a modest 2.5 per cent rise. While Upper Fifth Avenue remained flat, neighbouring Madison Avenue and SoHo rose more than 8 per cent, offering luxury brands competitive value at 30–50 per cent lower rents. Canada’s Vancouver recorded a robust rebound as Robson Street rents rose 20 per cent after a steep fall in 2024.

 “The enduring appeal of the world’s premier main streets lies in their unique blend of heritage, visibility and cultural cachet. Securing space on these streets can be extremely challenging, demanding innovative approaches to unlock new opportunities.” Robert Travers, head of EMEA Retail at Cushman & Wakefield, added.

Asia Pacific markets saw mixed performance, with India’s Tier 1 cities leading growth. Gurgaon’s Galleria Market soared 25 per cent, while Connaught Place in New Delhi and Kemps Corner in Mumbai climbed 14 and 10 per cent respectively. Japan also posted healthy gains, with Tokyo’s Ginza and Omotesando rising 10 and 13 per cent. Meanwhile, Hong Kong’s Tsim Sha Tsui dropped 6 per cent to $1,515 psf/yr, reflecting ongoing economic challenges. Sydney’s Pitt Street Mall returned to positive momentum, up 4 per cent to $795 psf/yr.

Prime retail destinations are expected to outperform broader market trends, demonstrating resilience. While interest rates remain elevated, inflation pressures are easing, and central banks retain capacity for further rate cuts. This, combined with stabilising consumer sentiment, real wage growth and a rebound in international tourism, is expected to support retail performance in the coming year. 

“Prime retail corridors are benefiting from a convergence of factors including resilient economic growth, easing cost of living pressures, and a renewed appetite for discretionary spending. The continuing importance of physical retail, particularly for deep and meaningful brand engagement in places where consumers want to be, reinforces the enduring appeal of the world’s premier shopping streets and we expect this momentum to strengthen as global conditions improve.” Report author Dr Dominic Brown, Cushman & Wakefield’s head of international research, said.

ALCHEMPro News Desk (HU)