MAPIC: Prime rents in sought-after retail streets increase by 6%

Retail property in luxury European locations performed strongly over the year to June 2013 with prime rents increasing by 5.7%, according to data released at Mapic in Cannes by Cushman & Wakefield.

Rental growth witnessed in streets which house the world’s leading luxury brands easily outpaced the rise recorded in Europe’s mass/ non-luxury market (1.3%).

'The European retail market has been bolstered by a steady improvement in economic conditions,' commented Martin Mahmuti, a senior analyst in C&W's European Research Group. 'However, luxury locations were the main catalysts behind the rental growth revival, a contrasting performance compared with non-luxury locations, which while growing, did so at an unspectacular rate. Tourists from different corners of the world continue to provide the impetus for a number of luxury destinations and this will remain the case, particularly for sought-after streets in gateway cities.'

Europe remains a crucial luxury market accounting for 30-40% of sales globally for most major brands with France, the UK, Italy and Switzerland the top markets. More notably, it is also the most important manufacturing base for many of the world’s luxury brands.

The most expensive retail location in Europe was again the Avenue des Champs-Élysées in Paris which saw a rental rise of 38.5%. In the UK, meanwhile, with continued demand from international luxury brands, rents in London’s New Bond Street increased by 15.6% to make it the second most sought after street in EMEA. Milan’s Via Montenapoleone, which houses brands such as Dior, Gucci, Louis Vuitton and Prada, is placed third and saw a healthy increase of 7.1%.

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