The unstinting demand for retail properties in Europe’s prime luxury locations, coupled with the limited availability of top retail spots, has helped boost rents on a number of luxury streets over the past year.
According to research from global real estate advisor Cushman & Wakefield, while retail rents in prime luxury areas across Europe rose a healthy 5.7 percent in the year to June 2013, a number of streets notched up major gains. Paris’ Avenue des Champs-Élysées saw rents rocket 38.5 percent to $1,601 a square foot annually, making it the most expensive retail location on the continent. Meanwhile, rental levels on Paris’ Rue du Faubourg Saint-Honoré and Avenue Montaigne surged 25 percent to $889 a square foot, while levels on London’s New Bond Street gained 15.6 percent to $1,047 a square foot.
Peter Mace, head of central London retail at Cushman & Wakefield, offered some insight into luxury retail property’s robust performance.
• As retailers tend to hold on to property in prime luxury areas, a lack of liquidity in the market makes the demand for rarely available properties intense. One jewelry house Mace is representing has been “waiting for two years” to get a spot on New Bond Street. As a consequence, retailers who want to gain representation on prime retail streets will pay tens of millions of pounds in key money — a onetime payment to an existing tenant — to take over its lease. On top of this, rental costs rise as 10 brands compete for each property that becomes available on New Bond Street. “There’s a complete imbalance of supply and demand,” said Mace.
• The popularity of Europe’s prime luxury areas among international tourists means a presence there is a must for top labels.
“Most of these luxury brands rely on international tourism [for sales],” said Mace. “And it’s not just in the summer months, it’s all the time.” That means rents in prime luxury areas outpace those in locations slightly off the tourist track, such as London’s King’s Road and Kensington High Street, which rely on spending by locals. “There, you’ve seen rents stagnate.”
• There’s increasing hunger for large “maison”-style stores in prime locations, encouraging retailers to expand their existing stores or secure bigger spaces, thereby fueling demand. Christian Dubois, managing director of Cushman & Wakefield in Paris, noted that “established players inaugurating refurbished formats to face increasing competition” is one of the factors driving rents in Paris’ luxury areas.
Meanwhile, in London, Chanel and Belstaff both opened large-scale stores on New Bond Street this year, joining Louis Vuitton’s maison, which bowed on the street in 2010. Mace said that facing competition from online retail, retailers are “trying to reinvent themselves and [make shopping] more of an experience.”Landlords are also driving this trend — Mace noted that London’s Crown Estate is striving to reduce the number of stores on Regent Street but make each unit larger, encouraging brands to carry their full product range in those stores, thereby being more of a draw to shoppers.
• Mace believes rents will continue to make steady progress in prime luxury areas, with bigger gains ahead for pockets of streets that are undeveloped. The north end of New Bond Street, for example, is being redeveloped as part of Transport for London’s Crossrail project. While rents in that area are relatively low, in 2017, when the Crossrail project is completed, Mace predicts the rents will “shoot up.”
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews