Éric Le Goff, Associate Director of Cushman & Wakefield

Has New York real estate reached its peak?

E. L. G. - I don't think so, at least not in my sector, commercial property. After the upturn at the end of 2002/beginning of 2003 and the exceptional year of 2004, we are still seeing the same trends. Let's take the most symbolic example: Fifth Avenue, between 48th and 59th Streets, in other words, the most prestigious area for retail. In 2001, rents there were 500 dollars a square foot. Today, they're already at $1,000, and there's still far more demand than supply. This is not an isolated example. There is still a lot of pressure on Manhattan because, for all the brands, central New York remains the most sought-after place to set up a flagship store and establish a brand's reputation.

Is the rise in rents offset by increased visitor numbers?

E. L. G. - More than ever! Household incomes and spending are continuing to rise, and we are seeing a gradual democratisation of luxury brands: consider that there are already more than 70 Vuitton shops in the United States... More generally, this move upmarket is changing the image of certain districts, such as Times Square, where more prestigious brands are now setting up shop, or 34th Street, which has become in New York what Rue de Rivoli is in Paris: a mid-market paradise.

You also predict a renaissance in the downtown retail landscape...

E. L. G. - I do believe that this district, which was particularly hard hit by 9/11, is making a comeback at the top end of the market. Here are a few signs: BMW, Tiffany and Hermès, which has just taken 500 m2 on Broad Street. Let's not forget that a record 12 billion in bonuses were distributed in the bank last year. The people of Wall Street have to spend them...

So should we reject the "US property crash" hypothesis out of hand?

E. L. G. - Not exactly, but the slowdown we're hearing a lot about at the moment is concentrated in the residential sector, and in a few areas such as the Mid-West and California, where there has been a lot of overbuilding in recent years. In New York, even in the residential sector, the impact is much weaker, and experts are predicting at worst that prices will stabilise after the sharp increases of recent years. There has also been a small increase in the negotiation rate, which used to be around 3-4 % in Manhattan, and has now risen to around 8 %.