The number of new international entrants to the Paris retail market is set to outstrip London this year, according to research by Savills.
Paris is expected to attract 29 new entrants this year, including S.Deer and Nixon, while London is predicted to record 26 openings including Dsquared2 and Alexander Wang.
The figures represent a reversal of fortunes compared to last year when Paris attracted 24 new international entrants compared to 30 in London.
Marie Hickey, retail research director at Savills, said: “The Chinese visitor story is still very persuasive to brands and Paris continues to outpace London in this respect.
“But, with improved visa streamlining, we could see London start to consistently outperform Paris in terms of new entrants over the next three years especially in light of it being cheaper from a total occupational cost perspective. For example, Zone A rents on Bond Street are 27% cheaper than on the Champs Elysées.”
According to Savills, the largest proportion of new retail entrants to Paris are luxury or accessible luxury brands which have represented 36% of the total since 2012.
In London the number is slightly smaller at 31% and aspirational brands represent the largest part of the market with a 40% share in the last three years.
For both cities the arrival of new brands is maintaining occupational demand and rental growth while supply remains constrained.
Average grade A rents across central London have risen annually by 11.5% over the last three years with rental growth as high as 27.2% a year on Bond Street. Over the same period, grade A rents on the Champs Elysées rose by 8% per year
Anthony Selwyn, head of Savills central London retail, said: “In London we know there is a growing list of requirement from international retailers as they understand that it is a key city to be located in as a gateway to the European market.
“Availability constraints on prime pitches have meant that retailers are looking beyond the traditional established locations and expanding into nearby streets that still provide the high footfall they are looking for.”
18 January 2017
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