MAPIC 2013: Demand for space on Europe’s most desirable shopping streets has pushed rents up by up to 20% this year.
According to Colliers International’s Q3 report on the most sought-after retail locations, prime rents have now reached £804 per sq ft per year on Old Bond Street, W1. It makes London host to the most expensive shopping street in Europe where demand for flagship space continues to exceed supply.
While most of the top 10 high streets in Europe recorded annual growth, difficult market conditions revised downward overvalued prime rents on Geneva’s Rue du Rhône. It suffered the largest decline in the top 10, down 14% on the same period last year.
Oslo in Norway reported a 33% increase in the last 12 months, and an 11% rise over the last six months. Other high streets which saw significant rental growth were in Manchester (up 9.5%), and Belgrade (up 9.1%).
Sean Briggs, managing director of Retail Agency in Europe, said: “Further growth in prime rents is expected in London, where demand for flagship space continues to exceed supply. Rental growth is also expected in the Baltic capitals as a result of limited number of projects in the pipeline and stable demand for retail space.”
Eastern European brands are expanding out of home territories and into new international markets. Polish retailers LPP are entering new Eastern Europe markets and the Middle East, as well as considering the more established Western European markets; Polish footwear brand, CCC, is entering Slovenia, Austria and Turkey, with additional stores to open in Croatia and Germany.
The city which recorded the highest increase in prime shopping centre rents was Serbia’s capital, Belgrade, which experienced over 30% annual growth. The Baltics also experienced upward pressure on shopping centre rents due to low vacancy levels and stable demand. Growth was also seen in prime shopping centres rents in Oslo (10%), Dusseldorf (5.4%) and Minsk (5.7%).
The weakest performers were recorded in Southern European markets, although prime locations in major cities continue to attract international retailers.