London’s soaring retail property fortunes


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This article is taken from the latest edition of Fladgate’s Fashion Update. Please email the marketing team on marketing@fladgate.com to be added to the mailing list for future updates.

It is fair to say that the UK high street has taken a bit of a battering over the past few years. It has been reported that one in six shops across the UK lies empty. A number of household names have vanished and demand for the resulting vacant premises has been low.

The market is especially challenging outside London. However, the fortunes of Central London’s prime shopping streets could not be more different. In fact, a report by international property consultancy Colliers International reveals Bond Street as the most expensive street in Europe.

Rents on Bond Street reached new heights of £838 per square foot per year in 2013 with Bahnhofstrasse in Zurich, the Champs Elysées in Paris, Via Monte Napoleone in Milan and Stolesnhikov Lane in Moscow all giving Bond Street a close run for its money.

The demand for flagship stores in London’s West End is such that retailers are prepared to pay considerable “key money” for their stores. Key money is a one-off payment to existing tenants to take over their existing leases. The payment is over and above the agreed rent payable to the landlord under the lease.

The following are some examples of recent key money paid in the West End of London:

  • Forever 21 paid £13.75 million to HMV for its 35,000 sq ft site at 360 Oxford Street.
  • La Perla paid Gina Footwear over £5 million for a 600 sq ft shop at 9 Old Bond Street.
  • Patek Philippe paid £10 million to Watches of Switzerland for its 1,200 sq ft store at 16 New Bond Street.
  • SuperGroup paid Austin Reed £12 million for its lease of 103-113 Regent Street. The rent at the five-floor property is reported to be approximately £2.5 million a year.

Demand for flagship space in London continues to far exceed supply and property experts are not expecting things to change any time soon.

Incidentally, the most expensive shopping streets overall are currently Fifth Avenue in New York and Queen’s Road Central in Hong Kong.

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