JLL ranks London as the most attractive European city for international retailers, but Europe’s key retail cities continue to power ahead.
London is the most attractive European location for international retailers according to a new cross-border retailer index compiled by global real estate adviser JLL. The index, launched today in a new report entitled Destination Europe 2015 analyses the expansion and presence of 250 international retailers across 57 key retail markets.
London has also increased its lead on Paris as the most attractive destination for luxury retailers in Europe. The report shows that there is clear water between these two world-renowned retail locations and the rest of Europe. This goes some way towards demonstrating the value luxury retailers place on having presence in iconic retailing locations and the scarcity of supply. As a consequence, retail space in New Bond Street can command the most expensive headline rents in Europe at €12,300 per sq m per year - an astonishing 42% growth on the levels achieved in 2012.
Retailers looking for new points of entry
The transitional markets of Moscow (3rd) and Istanbul (7th) have become Europe’s retail success story - no two cities have attracted as many new entrants over the past two years. Despite the increased levels of geo-political risk, Moscow’s retail market is thriving upon its sheer market size, fast rising levels of disposable incomes and rapidly growing shopping centre stock. Istanbul’s retail market is also revolutionising at great speed. Attracted by its modern high quality shopping centre stock such as the Zorlu Centre and the announcement of Galeries Lafayette anchoring Emaar Square, an increasing number of retailers are considering Istanbul as a first point of entry to Europe.
Retailers show appetite for expansion
In comparison to Destination Europe 2013, a shift has occurred whereby mainstream and premium retailers have generally expanded at a faster rate than established luxury retailers, and therefore have moved up the rankings. H&M joins Zara as the joint leaders of the retailer coverage league, with 100% presence across the 57 key European markets. They are followed by Mango and The Body Shop in the rankings.
The US, driven by expanding premium retail brands, has overtaken Italy as the largest exporter of cross border retail fascias in Europe. The most expansive retailer in our sample is the American premium retailer Michael Kors, followed by Superdry, Cos and 7 For All Mankind*. In addition, many European retailers have also shown impressive expansion in the past two years, including Ecco and Hugo Boss. Looking to the future, an influx of brands is expected to enter the European market from the Asia-Pacific region.