Leading retailers are paying multi-million-euro pound lease premiums, or key money, in London as the race for space continues on top high street locations such as Oxford Street, Regent Street and Bond Street. According to figures released by Cushman & Wakefield, US retailer Forever 21 recently paid a staggering £13.75 mln in key money for HMV’s lease on Oxford Street. Meanwhile Hollister is rumoured to be paying £10 mln key money for the National Geographic Store at 83-97 Regent Street. Last summer, French retailer Chanel paid £7 mln to secure Nicole Farhi’s store on New Bond Street
Leading retailers are paying multi-million-euro pound lease premiums, or key money, in London as the race for space continues on top high street locations such as Oxford Street, Regent Street and Bond Street. According to figures released by Cushman & Wakefield, US retailer Forever 21 recently paid a staggering £13.75 mln in key money for HMV’s lease on Oxford Street. Meanwhile Hollister is rumoured to be paying £10 mln key money for the National Geographic Store at 83-97 Regent Street. Last summer, French retailer Chanel paid £7 mln to secure Nicole Farhi’s store on New Bond Street
With availability in both prime and secondary shopping areas in the capital at its lowest level for the past two decades, competition for space in desirable retail locations in the UK capital is set to intensify further, according to Cushman & Wakefield. The global property consultant expects zone A rents for prime retail property on Bond Street, supported by very strong luxury retailing, to reach £1,500 per sq ft by 2013. Although 60% of the 145 trading units on the street have been traded over the past decade, only 10% have been traded more than once, it explained.
International retailers are spearheading the run on high-street locations, with French brands such as Aubade, The Kooples and Comptoir des Cotonniers particularly keen to boost their presence. Other countries represented include Spain (Desigual, Mango, Camper, Blanco), Italy (Calzedonia, Boggi, Trussardi) and Germany (Jack Wolfskin, Thomas Sabo, Esprit, Deichmann). US retailers are also driving demand with recently opened shops including Eileen Fisher, Coach and True Religion while lingerie brand Victoria’s Secrets is due to open a 18,000 sq ft store on New Bond Street in 2012. Other US retailers looking to open new stores in London include Banana Republic, Urban Outfitters, Anthropologie and American Eagle Outfitters.
The phenomenon of key money is not new in London, but in recent years the number of transactions and levels have increased dramatically. The payment of lease premiums is not uncommon either in the prime retail pitches of other European cities such as Paris and Milan.
The full article appears in the November issue of PropertyEU Magazine. Click on the following link to subscribe:
