Paris set to beat London with number of new international retail entrants in 2015

Research from Savills has shown that the number of new international retail entrants in Paris is expected to total 29 this year, whereas in London the number is predicted to be 26.  Examples in Paris include S.Deer and Nixon, and in London Dquared2 and Alexander Wang have opened stores. In 2014 Paris attracted 24 new international entrants and London attracted 30.

Marie Hickey, retail research director at Savills, comments: “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 proportion of new international retail entrants to Paris that are classified as luxury or ‘accessible’ luxury brands, stands at 36% since 2012 and is the largest sector of new entrants to the city.  In  London  the number is slightly smaller at 31% and it is the aspirational brands that have been more prolific accounting for 40% of the market over the past three years.

Christian Nehme, director of retail at Savills Paris, says: “Paris has historically been known across the globe as a prime shopping destination but increasingly we have seen new international brands looking for stores. Interestingly we have seen a strengthening presence of Asian retailers in the last two years with two Japanese, two Chinese and three Korean brands opening in Paris, including Tom Greyhound and TTF Jewellery.”

The firm notes that the US has been a significant source market for both cities. Since 2012 London has attracted 22 US brands, including J Crew, John Varvatos and Alexander Wang. Paris has attracted 18 in the same period, two of which do not have an existing store in London including New York brand fashion brand Oak, which opened their first European store in Paris earlier this year.

For both cities the arrival of new brands is maintaining occupational demand and rental growth particularly in the face of constrained supply.  In the case of London, average Grade A rents across Central London have expanded by an average of 11.5% per annum over the last three years with rental growth of 27.2% per annum on London’s premier luxury street of Bond Street. In the same time on the Champs Elysées Grade A rent increased by 8% per annum.

Anthony Selwyn, head of Savills central London retail, adds: “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.”