Sean Briggs, Managing Director, Retail Agency for Eastern Europe at Colliers International said, “Some of the world’s biggest retailers arrived in Oslo during 2014, including Marks & Spencer, which will open its first store in November; Habitat has just opened its third store, Laura Ashley has moved into a better location and Domino’s made its debut appearance in September.  This activity is off the back of an impressive catalogue of luxury brands already in the City, including Marc Jacobs, Bottega Veneta, Hermes, Mulberry, Louis Vuitton and Gucci.”

 

In London, prime rents in Bond Street have remained stable for the last six months due to lack of supply restraining letting activity, although total rental growth for the last three years amounts to over 30 per cent. Rents in Bond Street are poised for further rental uplift, as are other high streets in Central London; an average prime Zone A rent is now 28 per cent above 2008 levels with 2014 yielding Central London’s most vehement year since 1998.

 

Only a handful of other markets saw growth in high street rents between Q1 and Q3 2014, these include: Dubai, Jeddah, Madrid, Glasgow, Amsterdam, Düsseldorf, Sofia and Vilnius. 

 

Whilst the overall economic recovery in Spain and Portugal remains fragile, growing customer confidence and increasing consumer spending augurs well for the retail market. 

Madrid has a dearth of vacant units available on Calle Preciados, its main shopping street, which has led to more activity in other locations, including Serrano Street, which recently welcomed retailers such as Stella McCartney, Nike and a new flagship store by Zara. Lisbon’s prime shopping areas of Chiado and Avenida da Liberdade are attracting international retailers due to the growing numbers of tourists and an increase in local consumer spending.

 

In EMEA’s prime shopping centres, Warsaw saw the highest increase in prime shopping centre rents (at 5.6 per cent), reflecting the limited availability of vacant units.  Further moderate growth has also been seen in Sofia, Vilnius and Tallinn. Limited new supply, combined with strong demand, is likely to continue to exert upward pressure on rents in Vilnius over the next 12 months, whilst Sofia and Tallinn rents are expected to stabilise.  In contrast, further rental decline was seen in Kiev shopping centres as well as Athens and Belgrade high streets.

 

Sean Briggs, continued, “The relatively flat rental levels witnessed in many European cities hides some interesting activity, with encouraging signs of growth across both high street rents, shopping centre rents as well as in the retail investment market.  Much of this can be attributed to a lack of availability in key locations, leading to the regeneration of new areas, as seen in Madrid with the lack of units available in Calle Preciados leading retailers to take space in Serrano Street.  This coupled with a good mix of domestic and international retailers entering new markets, has led to an increase in consumer spend and therefore more stability.  The retail mix still shows a good balance between luxury and budget retail.”

 EMEA retail investment volumes have continued to increase this year, reaching €32 billion at the end of Q3 2014, which represents a 19 per cent annual growth.  The UK took one third of the market share, followed by Germany, France and Spain.  Increased interest and limited supply of prime assets have put further pressure on prime yields in selected markets.

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