Na Příkopě remains Prague's most expensive street
The retail shopping area in Prague is expected to expand, and rents are rising
Prague's Na Příkopě street ranked as the 23rd most expensive shopping street in the world, up two spots from the previous year. The most expensive street in the world was the upper part of Fifth Avenue in New York City, followed by Hong Kong's Causeway Bay. Rental prices on those two streets have fallen, though, since last year according to 28th Main Streets Across the World survey by consultancy Cushman & Wakefield. The most expensive street in Europe is Avenue des Champs-Élysées, which came in third place.
The survey examined 462 locations in 71 countries, and ranked one street for each country. Real estate owners have been responding to changing demands of consumers and a changing retail environment, the survey states. There is an increasing share of food and beverage, as well as leisure elements. Rents increased in 36 percent of the places surveyed.
The rent on Na Příkopě is less than one-tenth of the Fifth Avenue. In Q2 2016 on Na Příkopě retailers spent EUR 2,400.00 per square meter per year, while on Fifth Avenue is was EUR 29,065.50 for the same amount of space, and EUR 27,884.00 at Causeway Bay. It dropped by more than half after that, with Champs-Élysées coming in at EUR 13,255.20. The least expensive location in Europe was Kaunas in Lithuania, at EUR 147 per square meter per year.
In Europe the trend is to use brick-and-mortar stores to complement the brand's online presence. Due to lack of supply, the boundaries of the main shopping streets are also expanding.
While the survey ranks only one street for each country, the French capital Paris has five of the top 10 most expensive shopping streets in the EMEA (Europe, Middle East and Africa) region. Tourism and tourist spending was down in Paris in 2015/16.
The outlook for Na Příkopě is that rents will increase in the near term. Fifth Avenue and Champs-Élysées are expected to remain stable while Causeway Bay is expected to see a drop.
“It can be assumed that the value of rents in the Czech Republic will grow in the future. Strong interest in retail space in the center of Prague was evidenced by the arrival of more than 14 brands in the past 12 months,” Cushman & Wakefield partner Jan Kotrbáček said.
The report also said main high streets in the Czech Republic have continued to see high demand from mass and luxury retailers. “Pařížská Street in Prague, home to the majority of luxury brands, saw 5.4 percent rental growth in the year to June. With demand improving from this segment of the market, the traditional boundaries are expected to spread further to Široka Street. Na Příkopě Street in Prague, traditionally attracted mass market retailers, but the whole development of the street (new projects, environment, newcomers etc) has seen higher demand here from premium brands than mass market retailers. As an historical retail destination, Wenceslas Square is becoming the prime mass market retail area, and there are also opportunities to place important department stores here,” the report stated.
Kotrbáček pointed out that the planned Savarin project would connect Na Příkopě with Wenceslas Square and Jindřišská Street, creating 35,000 square meters of retail space. The shopping area is also extending from náměstí Republiky in the direction of Florenc, going across V Celnici Street and Masarykovo nádraží.
In the CEE region, Váci utca in Budapest was 35th place, Nowy Świat in Warsaw was 40th place and Obchodná ulica in Bratislava was 54th place. In Germany the most expensive street was Kaufinger/Neuhauser in Munich, coming in at 11th place. Kohlmarkt in Vienna was Austria's top street, in 10th place.
The largest retail decline in Europe was on Stoleshnikov in Moscow, where it they fell 26 percent to EUR 2,818.20 per year and is expected to continue to fall. Stoleshnikov was in 19th place on the survey dropping from 13th place worldwide in the previous year.
The biggest retail growth in Europe was at London's Covent Garden, where it rose 32 percent. The most expensive street in London for rents, however, was New Bond Street, which was in fourth place globally and second in Europe.
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