An unprecedented boom in luxury retailing is leading the retail recovery in London and other prime shopping locations across the globe.
In its latest retail study of 125 key shopping districts across 50 countries around the globe, Colliers International reports that luxury retail continues to show strong growth. The major theme running through this year’s report is that luxury retail continues to show strong growth and is serving as the impetus for growth across several sectors.
Soaring rents on London’s Bond Street are a vivid illustration of the booming luxury market as brands develop their market reach and tap into increasing consumer confidence. New retail chains entering London’s luxury quarter include ElevenParis, Scotch & Soda, Lavand, Filson/Gant Rugger, Cath Kidston, Hunter, Sunspel and Warehouse, and top European and U.S. retailers such as G Star, Chanel, Lulu Lemon, Tiger and J Crew. Fierce competition for limited shop space in locations such as Regent Street, Bond Street, Oxford Street and Sloane Street is displacing domestic retailers and newcomers that cannot afford the rapidly rising rents and are forced to take space elsewhere.
Robust demand is leading to new supply; more than 30 major retail development projects planned in and around greater London, which equates to 10 million square feet of new retail space to be delivered: the equivalent of seven Bluewater shopping centres.
Paul Souber, Colliers’ Head of Central London Retail Agency, comments: “Our analysis of the global retail real estate environment reveals what we have been seeing this year - a retail market that is cautiously optimistic and steadily growing in many sectors despite some caution regarding global economic growth and also the long-term effects of e-commerce.
“Luxury brands are taking larger stores and growing their networks as more and more shoppers want to buy into the premium retailing experience.”
Although London rents have leapt forward in recent months, New York’s Fifth Avenue is still the most expensive retail location for luxury brands with rents almost treble those of Bond Street.
Paul Souber comments: “Some people have questioned whether the rental increases in prime London locations are sustainable. However, this rental differential with New York indicates that with London’s ability to attract international brands and the major predicted population growth for the city, there is further scope for upward movement”.