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Fifth Avenue Rents Ranked Most Expensive Retail Space in the World
By: Hellen Zaboulani
Manhattan’s Fifth Avenue has held on to its resurgence, being ranked as the most expensive shopping destination in the world for the second year in a row. Retail rental prices for upper Fifth Avenue (from 49th to 60th Streets) averaged $2,000 a square foot over the last year, per data from Cushman & Wakefield. As reported by the Wall Street Journal, the average rent was around 13% higher than the world’s next-most-expensive shopping spot, which was named as Via Montenapoleone in Milano, Italy (with rental prices reaching $1,766 per square foot after 20% year-over-year rental growth).
In 2022, New York City toppled Hong Kong from the top of the list, taking its place, for the first time since 2017, as the most expensive shopping corridor. In 2023, Fifth Ave was crowned a second time, despite its flat rental growth year-over-year. Hong Kong’s Tsim Sha Tsui, is now ranked third, with rents at $1,493 per square foot amid a 4% annual increase, per Metro Manhattan. NYC’s Fifth Avenue shopping corridor has earned unrivaled allure as a prime retail hotspot, attracting locals and tourists alike.
To be sure, NYC’s and Fifth Avenue’s retail rental prices still haven’t reached pre-pandemic levels. Still, there is plenty of good news, a solid increase in traffic compared to the pandemic, and store vacancies have decreased. Fifth Avenue and neighboring Rockefeller Center saw visits to the Rockefeller Center Christmas Tree plummet 75% during the 2020 pandemic holiday season. This year, in contrast, the area felt packed to the brim for the holidays, with police barriers set up along the sidewalk near Saks Fifth Avenue’s window display to keep people from crowding into the streets. The iconic department store had a light show every five minutes during the evenings for the holidays, and Dior took over much of the store’s facade with a celestial-inspired clock featuring close to 300,000 LED lights.
The Fifth Avenue Association, which represents the corridor’s business owners, also did its part to beautify the streets, installing 150 live fir trees decorated with white lights along the avenue’s sidewalks. The association also partnered with the fragrance brand NEST New York to embed the trees with diffusers that gave off a holiday scent, described as a mix of pomegranate, mandarin orange, pine, and cinnamon with a touch of vanilla.
Fifth Ave’s top rent retail prices are mostly a function of the robust occupancy rates. Retailers, including Abercrombie & Fitch and Citizen Watch, have been opening new stores in Fifth Ave. In early December, Swarovski, the crystal and jewelry company founded in 1895, opened a new two-story flagship store on Fifth Avenue in a corner storefront previously vacated by Gap. The 14,400-square-foot store at 620 Fifth Ave, in Rockefeller Center, is the company’s largest headquarters ever, and marks their 10th store opening in North America for 2023. “It’s by far the biggest Swarovski location in the world,” said Kolja Kiofsky, Swarovski’s General Manager for North America. The colorful store, designed by Swarovski’s creative director Giovanna Engelbert, has so far experienced double the average foot traffic of Swarovski’s other NYC locations. Customers are spending twice as much time in the new flagship and spending more money on average, with Swarovski’s annual-edition ornaments and lab-grown diamonds selling especially well, Kiofsky told the WSJ.
A few blocks up, at 727 Fifth Ave, Tiffany & Co’s redesigned NYC flagship store opened in April, after three years of renovations. The 10-story flagship may have cost roughly $500 million, analysts estimate, complete with a private club on the top floor, art installations, a cafe’ headed by Michelin-starred chef Daniel Boulud and exquisite chandeliers of the store’s trademark robin’s-egg-blue boxes. The company’s investment was a sign of confidence in Fifth Avenues enduring value.
