CENTRAL LONDON RETAIL HEALTHCHECKtransact.westminster.gov.uk/docstores/publications_store/planning/... · CENTRAL LONDON RETAIL HEALTHCHECK NOVEMBER 2015 1 CENTRAL LONDON RETAIL HEALTHCHECK

CENTRAL LONDON RETAIL HEALTHCHECK NOVEMBER 2015 1

CENTRAL LONDON RETAIL HEALTHCHECKWinter 2015

The astonishing trajectory of London’s retail property market continues. As rents spiral upwards and brands from across the world target London, new shopping areas are emerging across the capital.

The latest Central London Retail Healthcheck reports on what is happening across 16 of the West End’s established and emergent retail pitches, and vividly illustrates how the sector continues to go from strength to strength.

By monitoring vacancy, unit turnover, rental levels, brand nationality and character, the research paints a picture of London’s shopping scene that goes beyond simple statistics.

We look at the continuing internationalisation of London’s shopping scene, and how the retail offers on some of its best-known streets are changing as new brands arrive in town.

CENTRAL LONDON PRIME SHOP RENTS ARE NOW 50% HIGHER THAN 2009 LEVELS

BRANDS ARE WILLING TO INVEST SIGNIFICANT SUMS IN SECURING THE RIGHT LOCATIONS AND CREATING BRAND-DEFINING STORES

EMERGING PITCH VACANCY RATES FALL 50% YEAR ON YEAR IN THE FACE OF INCREASING DEMAND

INTERNATIONAL BRANDS ARE BRINGING A NEW FLAVOUR TO LONDON AS CLUSTERS OF STREET IDENTITIES EMERGE

LONDON’S LEADING STREETS ARE DEVELOPING PRODUCT SPECIALISMS

EMERGING RETAIL LOCATIONS SEEING INFLUX OF DOMESTIC AND INTERNATIONAL BRANDS

FEWER THAN HALF THE SHOPS IN LONDON’S WEST END ARE NOW OCCUPIED BY BRITISH BRANDS

THE CHANGING FACE OF LONDON SHOPPING

2CENTRAL LONDON RETAIL HEALTHCHECK WINTER 2015 2CENTRAL LONDON RETAIL HEALTHCHECK WINTER 2015

3

+49%

+20%

-11%

THE INCREASE IN CENTRAL LONDON RETAIL RENTS CONTINUES TO GATHER PACE, WITH THE RATE OF GROWTH OVER THE PAST TWO YEARS FAR EXCEEDING OUTER LONDON

CENTRAL LONDON PRIME SHOP RENTS ARE NOW 50% HIGHER THAN 2009 LEVELS

2009 2010 2011 2012 2013 2014 2015

Source: Colliers International

RENT

AL G

ROW

TH 2

009-

2015


4

Rents on Bond Street are expected to reach a new high of £1,700 Zone A in 2016 and this has compelled brands to look at opportunities elsewhere in the Mayfair core.

Mount Street is a rapidly maturing alternative to Bond Street. The proactive management of the tenant mix by Grosvenor helped establish the street as a high end destination.

As a template for the rise of a new luxury destination, Mount Street shows how the initial opening of a renowned brand (here it was Marc Jacobs) can be the catalyst for rapid change, pronounced rental growth and sustained occupier demand from high profile international brands, particularly when supported by dominant freehold ownership and public realm investment.

ESTABLISHED PITCHES

EMERGING PITCHES

AS RENTS SPIRAL UPWARDS, MANY RETAILERS ARE LOOKING BEYOND THE CAPITAL’S TRADITIONAL PITCHES, PUSHING UP RENTS ON EMERGING STREETS

Brom

pton R

oad

Carna

by St

reet

Kings

Road

Rege

nt Str

eet

Picca

dilly

Jerm

yn St

reet

Mount

Stree

t

Cond

uit St

reet

Oxford

St Ea

st

New Bo

nd St

reet

Sloan

e Stre

et

Oxford

St West

Bruto

n Stre

et

Old Bo

nd St

reet

Dover

Stree

t

Albemarl

e Stre

et

43%

37%

25%

21%

13%13%

10%10%10%10%8%8%8% 7%

3% 2%


RENT

AL G

ROW

TH 2

014-

2015


A total of 20 new luxury brands have opened on Mount Street in the last five years, which means that more than half of the available shops have found new occupiers.

This remarkable level of change is testament to the rapid journey the street has taken to becoming a ‘super luxury’ destination for the capital.

Public realm improvements, management of the tenant mix and demand from international brands priced out of more established West End destinations have all played a role in this rise.


MOUNT STREET - FROM TRADITIONAL PRESERVE OF ANTIQUE SHOPS TO ESTABLISHED INTERNATIONAL FASHION DESTINATION



2010

2011

2012

2013

2014

2015

Carolina Herrera (Fashion)

Mackintosh (Fashion)

Ralph Lauren(Fashion)

Nicholas Kirkwood (Shoes)

Loewe (Accessories)

Oscar de la Renta (Fashion)

Jessica McCormack (Jewellery) Nicholas Kirkwood (Shoes) Pringle of Scotland (Fashion)

Moynat (Accessories)

Celine (Accessories)

Gina (Shoes)

Roksanda Ilincic (Fashion)

Richard Mille (Watches)

Paule KA (Fashion)

Parmigiani (Jewellery)

Christopher Kane (Fashion)

Marni (Fashion)

Dior (Fashion)

5CENTRAL LONDON RETAIL HEALTHCHECK WINTER 2015 5CENTRAL LONDON RETAIL HEALTHCHECK WINTER 2015 5CENTRAL LONDON RETAIL HEALTHCHECK WINTER 2015

Albemarle Street has seen five fashion and accessory brands arrive in the past two years - tripling the street’s offer.

With planning permission submitted for a new maison concept in the current Guinot beauty salon and Boodles recently knocking their Bond Street unit through to create an entrance on Albemarle Street, we expect further openings to emphasise Albemarle Street’s fashion credentials.

NEW OPENINGS ON ALBEMARLE STREET SINCE 2013


ALBEMARLE STREET - THE NEXT ‘SLEEPING BEAUTY’ TO AWAKEN

Boodles knock through from Bond St

Alexander Wang (Fashion)

Faliero Sarti (Accessories)

Aquazzura (Shoes)

Pre 2013

2013

2014

2015

Barbara Tipple (Jewellery)

Asprey (Jewellery)

Garrard (Jewellery)

Buccalleti (Jewellery)

Paul Smith Extension (Fashion)

Amanda Wakeley (Fashion)

Marina Rinaldi (Fashion)

Gismondi (Jewellery)


1

Vacancy rates on established West End pitches such as Bond Street, Oxford Street and Regent Street have been consistently below 3% of floor space for the past five years. Any low level fluctuation has been down to small and/or peripheral units becoming free for short periods of time.

By contrast, looking back even a year or two, there was a much higher degree of vacancy on ‘emerging’ West End pitches. In 2014, 8.7% of units in our sample of emerging locations were vacant. This was still comfortably ahead of the average UK vacancy rate of 14%, but was triple the rate of the established pitches.

However, during the past 18 months, these locations have seen increasingly active occupier demand, particularly from international brands, which has led to rapidly falling vacancy and a significant pace of change on streets such as Albemarle Street, Dover Street and Mount Street.

EMERGING PITCH VACANCY RATES FALL 50% YEAR ON YEAR IN THE FACE OF INCREASING DEMAND

DURING THE PAST 12 TO 18 MONTHS THE NUMBER OF VACANT SHOPS IN EMERGING RETAIL LOCATIONS HAS SHRUNK AND THE LEVEL OF VACANCY IS NOW MORE CLOSELY ALIGNED TO THE SCARCITY OF UNITS ON PRIME PITCHES

ESTABLISHED PITCHESEMERGING PITCHES

3.4%3.5%

8.7%

2.6%

VACA

NCY

RATE

BY

UNIT

S



Jermyn Street has a long history as a British shopping destination dating back to 1664. This British tradition remains alive in 2015, with 88% of the shops that run between Haymarket and St James’s street representing British brands, the highest of all the streets surveyed.

By contrast, Sloane Street has only 23% of stores occupied by British brands, the same level of representation French brands have on the street. Italian retailers are the dominant brand nationality on Sloane Street and occupy 41% of the stores. Today, nine of the 16 streets surveyed have more international brands than British, reflecting the globalisation of London shopping.

FEWER THAN HALF THE SHOPS IN LONDON’S WEST END ARE NOW OCCUPIED BY BRITISH BRANDS

JERMYN STREET IS THE ‘MOST BRITISH’ STREET IN LONDON, WHILE SLOANE STREET IS THE ‘MOST INTERNATIONAL’


% B

RITI

SH B

RAND

S

JERM

YN S

T.

88%

OXFO

RD S

T. -

EAS

T

62%

PICC

ADIL

LY

60%

KING

S RO

AD

57%

ALBE

MAR

LE S

T.

56%

DOVE

R ST

REET

55%

OXFO

RD S

T. -

WES

T

55%

COND

UIT

ST.

48%

BROM

PTON

ROA

D

48%

BRUT

ON S

T.

42%

SOUT

H M

OLTO

N ST

.

36%

REGE

NT S

T.

35%

MOU

NT S

T.

32%

CARN

ABY

ST.

31%

BOND

ST.

25%

SLOA

NE S

T.

23%

ALL

46%


1

Jermyn Street, Piccadilly, Albemarle Street and Dover Street, continue to represent ‘British Best’ with luxury brands accounting for over 80% of the total retail units, and well over half these still being British occupied.

Carnaby Street represents ‘Fashion Forward’- an independent and international mix of brands bringing the best in youth fashion from around the world to the market.

Oxford Street, both the established western section and the rapidly improving eastern end, cater to the ‘Mixed Mass Market’. The broad range of goods on offer, particulary through department stores, give a wide appeal and the street retains a strong British emphasis.

The most luxurious streets where over 90% of the retail operators are luxury brands, such as Bond Street and Sloane Street, have less than 50% British brands today, but are home to ‘International Icons’ such as Dior, Hugo Boss and Prada.

Meanwhile, the ‘Globalised Goods’ cluster of Regent Street, Brompton Road and Kings Road, have elements of luxury, are home to some impressive flagships and mix British and international brands.

Oxford St (East)

Oxford St (West)

Kings Road

Albermarle Street

Dover Street

S. Molton Street

PiccadillyJermyn Street

Brompton Road

Carnaby Street

Regent Street

Mount Street

Bruton Street

Conduit Street

Bond Street

Sloane Street

LUXU

RY

BRITISH

INTERNATIONAL BRANDS ARE BRINGING A NEW FLAVOUR TO LONDON AS CLUSTERS OF STREET IDENTITIES EMERGE

THE IDENTITIES OF THE CAPITAL’S BEST-KNOWN SHOPPING STREETS ARE CHANGING AS LUXURY RETAILING BECOMES MORE PRONOUNCED AND INTERNATIONAL BRANDS BRING NEW CHARACTER TO LONDON’S STREETS

INTERNATIONAL ICONS

BRITISH BEST

GLOBAL GOODS

FASHION FORWARDMIXED MASS MARKET



JERMYN STREET

OXFORD STREET- EASTPICCADILLY

KINGS ROAD

BRUTON STREET

SOUTH MOLTON STREET

CARNABY STREET

BOND STREET

ALBEMARLE STREET

DOVER STREET

CONDUIT STREETOXFORD

STREET- WEST

• 73% of Dover Street is now occupied by fashion brands

• Watch specialists make up 16% of the stores on Bond Street

• South Molton Street has 4 times more childrenswear retailers than the average for the West End at 7%

Drilling down further still, each London street has product groups for which it is known; South Molton Street is a key destination for luxurious, international childrenswear, while Jermyn Street remains the leading location for classic British menswear. Those searching for a handbag should head to Mount Street or Brompton Road, whilst Kings Road remains the best West End destination to get inspiration for interior design.

The character of Bond Street has been altered by a series of watch shop openings in 2014-15, as Blancpain, Patek Phillipe, IWC and Jaeger-le- Coultre all headed to this most premium of locations for standalone stores. Today, watch specialists make up 16% of the stores on Bond Street behind only Fashion (31%) and Jewellery (22%).

There are also changing specialisms elsewhere, with Dover Street market attracting four neighbouring fashion openings in 2014-15, led by Victoria Beckham, and elevating Dover Street to a credible fashion destination where almost three quarters of units are fashion focussed.

Although the new Alexander Wang flagship implies that Albemarle Street is following a similar journey towards fashion, British jewellers and art galleries are still very much a part of the retail landscape here, with jewellery specialists continuing to make up 31% of the total retail units and fashion currently at 25%.

LONDON’S LEADING STREETS ARE DEVELOPING PRODUCT SPECIALISMS

PRODUCT CONCENTRATIONS ON SOME OF OUR STREETS ARE MANY TIMES THE WEST END AVERAGE, REFLECTING DEVELOPING SPECIALISMS AS CERTAIN TYPES OF RETAILER CLUSTER TOGETHER

MENSWEAR

WATCHES

SPORTS JEWELLERY HOMEWARE

FASHION LINGERIE CHILDRENSWEAR

NUMBER OF TIMES THE WEST END AVERAGE PERCENTAGE OF SPECIALSM BY STREET

8.0x

45%

12%

5.3x

31%

73%

5%

59%

67%

7%

6%

16%

5%

24%

3.2x 2.4x

2.0x

4.2x 3.8x

2.3x

2.0x 1.8x

2.9x

1.6x


1

In the face of unrelenting demand even on ‘emerging’ pitches, and with individual identities developing, brands are becoming more willing to invest significant sums in securing the right West End location and creating a brand-defining destination store.

Whether it is through the payment of large premiums (boutiques on New Bond Street have traded for premiums of more than £10m), extensions into neighbouring units or by undertaking ambitious refurbishment projects such as the Hermes flagship at 155 Bond Street, retailers are determined to derive maximum brand impact from their prime London locations.

Head of Central London Retail Agency, Paul Souber, comments:

“London has never been more popular with international retailers and their arrival on these shores is changing the face of the shopping scene.

BRANDS ARE WILLING TO INVEST SIGNIFICANT SUMS IN SECURING THE RIGHT LOCATIONS AND CREATING BRAND-DEFINING STORES

Whilst our research shows there is currently no shortage of occupier demand on West End streets, there is increasingly fierce competition from both global cities and destinations beyond the core of London.

The culture and heritage of London gives it a distinct retailing advantage, but it will take infrastructure investment and co-ordination, such as the New West End partnership between their Occupier BID and newly formed Property Owner BID, to make sure it continues its upward trajectory.

We need to invest in the city, promote its excellence and develop an influential and united voice to develop streetscapes that are the envy of the world, attract the biggest global brands and create the best shopping experience.”


Paul SouberHead of Central London Retail [email protected]

Jess FordSenior Retail [email protected]

Colliers International50 George StreetLondon W1U 7GA+44 20 7935 4499

Please contact us if you wish to discuss the contents of this report

This report gives information based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for negligence is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for investment or any other purposes. This report does not constitute and must not be treated as investment or valuation advice or an offer to buy or sell property. (December 2015) © 2015 Colliers International.

Colliers International is the licensed trading name of Colliers International Property Advisers UK LLP which is a limited liability partnership registered in England and Wales with registered number OC385143. Our registered office is at 50 George Street, London W1U 7GA. 15429


CENTRAL LONDON RETAIL HEALTHCHECKtransact.westminster.gov.uk/docstores/publications_store/planning/... · CENTRAL LONDON RETAIL HEALTHCHECK NOVEMBER 2015 1 CENTRAL LONDON RETAIL HEALTHCHECK

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