Milan’s Via Montenapoleone, where rents have risen by nearly a third in the past two years, has overtaken New York’s Upper 5th Avenue to be crowned the world’s most expensive retail destination, according to Cushman & Wakefield (NYSE: CWK).

It is the first time a European street has topped the global rankings in the firm’s flagship retail report ‘Main Streets Across the World’. Now in its 34th edition, the report focuses on headline rents in 138 best-in-class urban retail locations across the globe, many of which are linked to the luxury sector, utilising Cushman & Wakefield’s proprietary data. The global index ranks the most expensive destination in each market.

Synonymous with fashion and luxury, Via Montenapoleone has steadily climbed the rankings in recent years, reaching second for the first time in 2023. Rents rose 11% to US$2,047 per square foot (psf) in the past 12 months, whereas rents on Upper 5th Avenue (US$2,000) remained flat for a second consecutive year. Alongside continuing strong retailer demand amid constrained supply, Via Montenapoleone also benefitted from the euro’s appreciation against the U.S. dollar.

London’s New Bond Street (US$1,762) leapfrogged Hong Kong’s Tsim Sha Tsui to take third, despite the latter’s positive rental growth. With 10% year-on-year (YOY) rental growth, Paris’s Avenue des Champs Élysées retained fifth position, although Tokyo’s Ginza district narrowed the gap with a 25% YOY increase, 

Robert Travers, Head of EMEA Retail at Cushman & Wakefield, said: “These globally iconic locations are characterised by intense competition for space and extremely limited supply, even in challenging retail market conditions. Brands, from luxury to mass market, are doubling down on their physical stores in the top locations as competition for consumer attention drives the need for a superior shopping experience and product showcase. While e-commerce plays a role in an omni-channel strategy, it is the physical embodiment of the brand that customers connect with. As a result, vacancy rates remain exceptionally tight which translates into the rents that retailers are willing to pay to secure and retain their space.”

Competitive tension for limited space saw YOY rental growth recorded in 57% (79) of the 138 locations tracked, declines in just 14% (19), with the remainder 29% (40) flat. This resulted in a global average rental increase of 4.4%. Americas was the strongest performer regionally at 8.5%, driven by rental growth of almost 11% in the U.S. – more than double the 5.2% recorded last year – followed by Europe and Asia Pacific at 3.5% and 3.1% respectively. Rents across the 138 locations are now on average nearly 6% above pre-pandemic levels.

Global Outlook

Prime retail destinations have mostly successfully weathered the storm precipitated by interest rate hikes to curb inflation in 2022 and 2023, which led to a rapid increase in the cost of living, weak consumer sentiment and sluggish economic growth. Retail now stands to benefit from the gathering pace of interest rate cuts, economic recovery, easing cost of living pressures, and real wage increases.

Report author Dr. Dominic Brown, Cushman & Wakefield’s Head of International Research, said: “Increased discretionary spending among consumers will further boost the performance of prime retail destinations. How quickly and strongly that feeds through into rental growth at a market level will vary due to local nuances and market dynamics. Growth at a global and regional level was led by the U.S. this year, but every region had really strong double-digit growth in certain markets – truly exceptional in some cases – and others where rents have slipped for one reason or another. However, performance at the very top end underlines that the strength of ‘prime’ continues to rise and we expect that to continue as conditions improve.”

Asia Pacific

Hong Kong continued to feature strongly on the global rankings, coming in at number 4 this year. John Siu, Managing Director, Hong Kong at Cushman & Wakefield, said, "We are pleased to see Hong Kong maintaining its position as one of the top retail destinations globally. This achievement underscores the resilience and attractiveness of Hong Kong's retail market, even amidst a challenging business landscape. Looking ahead, we expect to see more leasing activities and an increasing importance of Chinese mainland brands and retailers entering the Hong Kong retail market, using it as a stepping-stone to promote their brands on the international stage.”

Rents closely reflected wider macroeconomic performance within the region. India has been the strongest major economy in the world this year, and Indiranagar 100 Feet Road in Bengaluru leads the region’s rental growth at 32% YOY. Rental growth across 16 tracked Indian locations averaged a 9% increase YOY. Southeast Asian economies also performed strongly, driven in part by robust domestic consumption, which has led to rental growth of up to 7% in Jakarta and between 1% to 5% elsewhere in the sub-region. Japan surprised by defying weak growth conditions. After four stable years, rents moved higher in 2024, led by Ginza at 25% YOY, while Osaka’s Midosuji recorded 9% growth. 

Dr. Dominic Brown said "As prime retail space becomes increasingly scarce; retailers are seeking high-profile locations beyond traditional main streets. In Sydney, we’re seeing elevated demand for sections of Castlereagh and George Streets, particularly around iconic intersections like King and Pitt Streets, which offer unparalleled visibility and foot traffic."

 "We’re witnessing a remarkable diversification of retailers on main streets, with brands like IKEA making bold moves into high-profile locations such as Oxford Street and Upper 5th Avenue. This trend is mirrored on Pitt Street, where we see a mix of fashion, sports, and general goods retailers thriving, while King Street continues to solidify its position as a hub for luxury brands."

"Longines' decision to open in Westfield in Sydney's CBD highlights the strategic use of available space and the alignment with their brand positioning. Meanwhile, Chanel’s commitment to a new space underscores the continued confidence of luxury retailers in Australia’s premium retail precincts."

“Tourism continues to drive a significant share of luxury retail sales, with 40-50% of luxury goods being purchased while travelling. Over 630,000 international visitors arrived in Australia in the 12 months to September 2024, a number just shy of pre-pandemic levels in 2019. As tourism numbers continue to recover, this should further boost performance of Australia’s super prime retail destinations.”

The full Main Streets Across the World report for 2024 is available here: