Most Recent Articles In Real Estate
Latest Real Estate Articles
- Caruso’s Carlsbad Project One Step Closer to Reality With City Council Vote
- Storefront Offers Location Ranking for Pop-up Shops
- Westfield Ramps Up Work on $800 Million Century City Remodel
More Articles By
London’s catwalks may be ablaze with talent, but this season, much of the action has been taking place off the runways and on the streets of Mayfair, Knightsbridge, and Covent Garden, where British and international labels are racing to secure prime space in a property market that is rapidly heating up.
This story first appeared in the September 16, 2013 issue of WWD. Subscribe Today.
The latest to join the fray is Christopher Kane, who will today reveal that he’s chosen Mount Street in Mayfair as the site of his first flagship, which will open by the end of next year. The designer, whose label is now majority-owned by Kering, joins a roster of big names who have planted new retail flags in central London. Paul Smith, Tom Ford, Pringle of Scotland, Belstaff and Longchamp are among the labels that are celebrating store openings this week, while Solange Azagury-Partridge, Amanda Wakeley, Victoria Beckham, Jimmy Choo, Dior, Chanel, Céline, Isabel Marant and Roksanda Ilincic are among the brands looking for — or recently securing — space in a golden retail arc that begins in Covent Garden, stretches to Mayfair and then over to Knightsbridge.
Those three neighborhoods — Mayfair in particular — have trampled once-hot retail zones such as Westbourne Grove, Sloane Square and the King’s Road, thanks chiefly to wealthy foreign tourists who regularly flood central London and to affluent international residents, many of whom spend only a few months of the year in their Belgravia townhouses or Knightsbridge penthouses.
“The whole world comes to Mayfair,” said Solange Azagury-Partridge, who earlier this month moved into a 5,000-square-foot townhouse at 5 Carlos Place, across from the Connaught hotel and off Mount Street. The new space houses the designer’s boutique on the ground and first floors, and a workshop, production facilities and the head office upstairs.
Not long ago, Azagury-Partridge had a shop that was a fixture on Westbourne Grove in Notting Hill, but after moving to Mayfair under her brand’s previous owners Labelux, she knew she could never have a store anywhere else. “Being in Mayfair after being in Notting Hill makes it impossible to return. Notting Hill is lovely, but feels more local and neighborhoody. Mayfair has real international, luxurious glamour,” she said.
Alexandre de Brettes, Christopher Kane’s chief executive officer, said the designer’s Mount Street store will have a worldwide reach. “London is a powerful retail center, so our store will become not only a destination for a global consumer, but an incredible marketing platform for the brand around the world.” For Kane and his sister Tammy Kane, deputy creative director of the label, there was no question about the location of their first store. “To open in London first was really important to us, as this is where our label was born,” they said.
Although Mayfair has always been popular, its emergence as London’s most in-demand retail neighborhood for fashion and luxury brands has been rapid. Mark Henderson, chairman of Savile Row tailor Gieves & Hawkes and of London Luxury Quarter, an organization that represents and promotes more than 40 luxury streets across Mayfair, Piccadilly and St. James’, said Internet shopping is partly responsible for Mayfair’s boom.
“Internet sales are increasing, and multichannel retailing is working exceptionally well. At Gieves, our customers may shop online twice a year, but they’ll also come into the store twice a year — and what they are looking for is a full brand experience. Mayfair is uniquely positioned to offer that because of the size and scale of the stores, the depth of the offering and the sheer concentration of brands,” he said.
Size and scale are major priorities, especially for the megabrands: In June, Chanel unveiled its new London flagship, a 12,600-square-foot space designed by Peter Marino on New Bond Street. Last September, Burberry opened a 44,000-square-foot flagship on Regent Street.
Earlier this month, Belstaff moved into a 26,000-square-foot property at 135-137 New Bond Street, with 3,500 square feet of selling space. In February 2012, when Belstaff took a 20-year lease on the building, it set a record for the highest rent paid for a new, open market letting. It will be paying 3 million pounds, or $4.7 million at current exchange, in annual rent. That equates to 840 pounds, or $1,324, a square foot for the prime ground-floor space. Today, on the other end of the street, deals are being done for up to 1,300 pounds, or just more than $2,049, a square foot.
In early November, J. Crew will open its first European flagship, a 17,000-square-foot space with about 11,000 square feet of selling space, on the corner of Regent and New Burlington Streets, while Fendi plans to unveil its Bond Street flagship — in the sprawling former Mallett art and antiques space — in the first quarter of 2014.
While Bond Street has always been in demand — especially among the big luxury and jewelry brands — its surrounding streets were mostly sleepy, dotted with independent shops, art and antiques galleries and cafés for local office workers. Not anymore.
“Eight years ago, we followed Stella McCartney’s lead and opened our flagship on Bruton Street, which was mostly lined with galleries and art dealers. It was a through road to Berkeley Square,” said Matthew Williamson, whose shop is at 28 Bruton Street. “We knew Bond Street wasn’t right for us, but we also knew we needed to be near the megabrands.”
Today, Bruton Street, which runs perpendicular to Bond, has become a fashion destination, with shops such as Miu Miu, Diane von Furstenberg, Alice Temperley and perfumer Miller Harris, and it’s one of many Mayfair streets in demand.
One of the most coveted streets in the area is Mount Street, which lay dormant — in the fashion retail sense — until Marc Jacobs planted his flag there in 2007.
Today, Helen Franks, head of retail leasing at Grosvenor, which owns and develops property across Mayfair, said she and her team “speak seriously” to about 10 brands for each unit that becomes available on Mount Street — home to brands including Jacobs, Goyard, Balenciaga and Lanvin.
Newcomers to Mount Street and to nearby Carlos Place this fall include Pringle, Céline, jeweler Jessica McCormack and eyewear brand Linda Farrow. Pringle previously had a larger store on Lower Sloane Street, near Sloane Square.
Douglas Fang, the brand’s vice chairman, said the team was immediately attracted to Mount Street. “It is — and remains — vibrant and varied in terms of retail formats. Also, thanks to one landlord [Grosvenor] overseeing development, it allows for a more interesting experience,” he said.
Franks acknowledges that she’s working with powerful tailwinds: “London is, and will always be, an international destination, and tourism and foreign visitors are a big driver for the international retailers in Mayfair.”
According to Global Blue, which operates the world’s biggest tax-free shopping network, in the seven months from January to July, the international shoppers with the highest spend in Mayfair were Americans, who made up 12 percent of total spend, up 12 percent from last year. Shoppers from China represented 10 percent of total spend, up 23 percent year-on-year, followed by those from Saudi Arabia, at 7 percent, up 15 percent compared with last year.
Russia accounted for 6 percent of the total spend in Mayfair, a 40 percent rise compared with 2012, while Qatar, Kuwait and Brazil each generated 5 percent of the spend, with those figures rising in the high double digits year-on-year.
“While Chinese tourists remain a key driving force behind spend in Mayfair due to their taste for luxury and bespoke items, spending on average 858 pounds [$1,352] per tax-free transaction, the number-one shopper in the area still remains the [American],” said Gordon Clark, U.K. country manager, Global Blue.
As Bond, Mount and Bruton Streets become oversubscribed, Conduit and Albemarle Streets are emerging as up-and-comers. According to real estate agent Savills, Dior has agreed to a deal for a ready-to-wear and accessories shop at 16 Conduit Street that will open in March, while Jimmy Choo will open a store at number 19.
John Varvatos plans to open at numbers 12 and 13, while a 9,000-square-foot retail development is in the works on the corner of Conduit and Savile Row. In addition, Louisa Guinness Gallery, which specializes in jewelry made by 20th-century artists including Picasso, Alexander Calder and Anish Kapoor, will open on the street.
Albemarle Street, which runs parallel to Bond and Dover Streets, has been one of Mayfair’s sleepier sites of late — despite longtime luxury resident Brown’s Hotel — but is set to blossom soon. According to a real estate source in London, a single landlord with “a clear vision” has been snapping up properties with an eye to transforming Albemarle into a hot retail destination. Earlier this month, Paul Smith opened an expanded shop on Albemarle, selling men’s and women’s clothing and furniture, in addition to special pieces and one-off designs.
“We have had our furniture and curiosity shop at number 9 Albemarle Street since October 2005, which has always been successful. So when the building next door became available, we couldn’t resist the opportunity to join the two,” said Smith, who owns the bulk of his retail properties worldwide.
“I like a slightly alternative location, and Albemarle Street is definitely one of those. Since we first moved there, the surrounding streets, such as Dover Street, have become quite popular. It is — and is continuing to become — a very interesting and vibrant location.”
Boodles, the luxury jeweler, is also set to open on Albemarle, as is Amanda Wakeley, which is moving to a townhouse at number 18 Albemarle Street, opposite Brown’s Hotel, later in the fall. The new space will span 3,000 square feet over three floors and showcase a new retail concept.
“Having a home in Mayfair is important from both a business and brand-image standpoint: We think it will expand our customer base, attracting different customers from our Fulham Road boutique and our concession in Harvey Nichols in Knightsbridge,” said Sagra Maceira de Rosen, the brand’s ceo.
Melandra Curley, a director at Savills, which is handling leases on Albemarle, said brands including Dsquared2 and Marc Jacobs and companies including Club 21, whose portfolio includes A|X Armani Exchange and DKNY Jeans, have expressed interest.
Mayfair’s prices per square foot vary greatly depending on the street: Bond is the most expensive, commanding up to 1,300 pounds, or just more than $2,049, per square foot, while Albemarle is fetching 400 pounds, or $630, and Dover 325 pounds, or $512. Tenants on Mount Street can be expected to pay up to 500 pounds, or $788, a square foot — plus key money — while Conduit commands up to 350 pounds, or $552.
While Mayfair may be super prime, two other neighborhoods are gaining momentum.
Knightsbridge, long a fashion destination, with Harrods and Harvey Nichols, as well as the designer boutiques on Sloane Street, is becoming even more attractive, thanks to several new developments. There is One Hyde Park, a Richard Rogers-designed residential development that includes a Rolex megastore and a McLaren Automotive shop and showroom, while real estate investor Chelsfield Partners is currently halfway through a 75 million pound, or $118 million, program to create a luxury shopping destination in a 3.5-acre stretch of Brompton Road that runs between Harvey Nichols and Harrods.
In the neighborhood, prices per square foot are averaging about 550 pounds, or $867, and can reach 800 pounds, or $1,261, plus key money, according to real estate sources.
On nearby Sloane Street, a major redevelopment of Liscartan House, on the southern part of Sloane Street, near Sloane Square, will be completed by the second quarter of 2015, with facilities for six large retailers, nine smaller ones and a restaurant.