It appears that the world"s most expensive boulevards have not "heard" of the world financial crisis and managed to achieve growth, or at least stagnation, of their prices in 94% of the 236 cases analysed by Cushman & Wakefield. New York"s Fifth Avenue remains the world"s most expensive boulevard, with retailers paying no less than 12,612 EUR/ square meter/ year, up by a staggering 23% from 2007.
Romania"s Magheru Boulevard achieved even more growth, of 26% compared to 2007. A year ago, the average monthly rate was 115 EUR/ square meter/ month. Now, it is 145 EUR/ square meter/ month with peaks as high as 190 EUR/ square meter/ month in some cases. The situation on Calea Victoriei is similar. Last year"s average of 100 EUR/ square meter/ month has gone up 35% to 135 EUR/ square meter/ month.
According to Cushman & Wakefield, these increase have pushed Magheru Boulevard one notch up in the world hierarchy to no. 26. Interestingly, all the growth was reported in the first two quarters of the year, while the third quarter was a period of stagnation. Valentin Manu, head of the High Street Department at Cushman & Wakefield Romania said: "The pressure for front-side commercial space has decreased. The time when there used to be auctions for such space is over. Bucharest cannot be compared to New York, Milan or Paris, where many of the dominant retailers come from the luxury fashion industry and the need to have a shop on main street is part of their brand. So the price of such space is not of interest," Manu added.
Manu pointed out that, in Romania, the main customers for high street spaces are banks, mobile telephony companies, pharmacies and casinos. Because of the financial crisis, banks, mobile telephony companies and pharmacies have stopped or downsized any expansion plans. Therefore, the decrease in demand will push rents down in the near future, Manu estimates. At European level, the average space for front-side commercial space is 160 EUR/ square meter/ month, up by 11.7% from last year. The highest growth was recorded in Central and Eastern Europe - 26.6%, while Western Europe only managed to go up 6.8%.