London was the most sought after city for retail investment in Europe last year, with 65 new brands opening, while Paris, the number two, was a distant second for Europe at 36. The success of London was partly attributed to the influx of tourists and the low pound, which pushed up interest from investors. Hong Kong took the number one spot with 87 new retain brands entering the market.
New analysis from CBRE, a real estate consulting firm, finds that the city of London is the second most sought after destination for the retail industry looking to expand their global operation. The city saw 65 new retailers open stores in the city last year – more than any of its European counterparts. The majority of the new premises were obtained by US-based chains and brands, while the total investment into the city by the retail industry hit a record £2 billion last year.
The city benefits from a range of factors, including its brand, an influx of tourists leveraging the lower pound, although competition too has picked up among retailers vying to secure the most prestigious spots and their key target demographics. In terms of type, 25% have been Mid-Range retailers, while certain areas, such as Mayfair, attracted the largest number of with luxury retailers and making up 20% of all new retail entrants. However despite benefiting from this continued popularity, London has also been a high-profile victim of gentrification and commercialism over the past few decades, in no small part thanks to the continued desirability of the city as a financial hub.
Hong Kong meanwhile, took the number one spot last year attracting 87 new brands last year, with London relatively far behind. Dubai came third (59), while Doha (58) and Tokyo (48) rounded off the top five. Singapore sixth (46), and Paris came seventh (36), although a distance behind London as the second European destination of choice for retail investment. Moscow (33) and Toronto (30) were eighth and ninth respectively – with no US city featuring in the top 17. Vienna completed the top ten with 29 new resident brands.
In the total rankings, European cities remain the preferred destination for global retailers at 43% of total new investments, up from 36% last year. This is in part due to the expansion of brands within the region across the wider market. Across the globe, coffee shops and restaurants saw the most new international expansions, at 22% of total expansions, specialist clothing stores (18%) followed, while mid-range fashion stores (17%) came third.
Commenting on the results of the study, Hugh Radford, Chairman of London Retail at CBRE said, “London is faring very well compared to other global cities and despite the heads winds of the business rates revaluation, which has had an impact on most retailers, international retail brands still continue to see the importance of having a store presence in London. The record number of tourists visiting London, benefitting from the weak pound, has also given a boost to most retailers’ sales figures. However, retailers are being increasingly selective about getting the right location and property to allow them to develop their retail offer and attract new customers.
David Close, Senior Director for Cross Border Retail, added, “The current economic climate has led to retail brands targeting tried-and-tested retail locations. Retailers are increasingly looking at the traditional strongholds of London, Paris and Hong Kong and stores in the most prominent cities remain a strategic opportunity to attract consumers, build brand loyalty and generate sales off-line and on.”