London's prime luxury retail streets continue to gleam despite economic gloom

13 Aug, 2012, London

To date this year, two of the world's top luxury shopping destinations - London's Bond Street and Sloane Street - have seen record levels of space change hands as top global luxury brands continue to secure new stores or to increase the size of their existing stores.

According to Cushman & Wakefield:

13 transactions have taken place
65,800 sq ft of space has been transacted
6,000 sq ft of new retailer space has been added: 15,000 sq ft on Bond Street and 11,000 sq ft on Sloane Street
Italian designers dominate, accounting for 38% of retail space transacted

Retailers upsizing
Designers have been clamoring to increase the size of their stores in order to satisfy rising demand from international shoppers and to boost profits. As a result, some 26,000 sq ft of new retail space has been added to Bond Street and Sloane Street to date in 2012, mainly by the conversion of office space into retail.

Lack of supply
At present, demand on both streets outstrips supply by about ten to one. As a result, many luxury brands are now having to locate just off Bond Street and Sloane Street out of necessity. Due to the level and quality of uptake, rental levels are now just under £1,000 on Bond Street with strong growth also reported on Sloane Street over the last 12 months.

Italian designers continue to dominate
Over one-third (38%) of the space transacted on the two streets this year was taken by Italian designers, accounting for five of the 13 deals. Several of these brands increased the size of their stores, these include:

Alberta Ferretti increasing its store at 205-206 Sloane Street, from 3,500 to 5,000 sq ft.
Loro Piana, with a store at 47 Sloane Street, buying the lease of number 48. By combining the two properties to create one flagship store, it will have expanded its space from 2,280 to 3,500 sq ft.
Salvatore Ferragamo, at 207 Sloane Street, acquiring the lease for the first floor from Pegasi Investments for an office to retail conversion, increasing its space from 4,000 to 6,000 sq ft.

After the Italians, Swiss designers accounted for the second largest percentage of retail space transacted so far this year (23%) and three of the 13 deals on Bond Street and Sloane Street. They included luxury Swiss brand Bally?s relocation from 116/117 New Bond Street to 45-46 New Bond Street.

French designers accounted for two deals (15% of retail space transacted) on the two streets. Upmarket brand Marithé François Girbaud - a new entrant to the UK - signed at 107 New Bond Street in February. The other French luxury designer was Tara Jarmon, which took assignment of 119 New Bond Street for its first standalone store in the UK. The 3,000 sq ft store will open later this summer.

One deal involved a U.S. brand - luxury designer Tom Ford signed at The Cadogan Estate?s new 201-206 Sloane Street development where it will open its first flagship store in the UK. The 7,000 sq ft store is scheduled to open in 2013.

And one deal involved a UK designer: iconic British brand Belstaff, owned by luxury group Labelux, leased 135/ 137 New Bond Street which totals around 25,000 sq ft. Belstaff will re-launch its historic brand from this flagship ?maison? store, which will open early next year.

All of the luxury fashion brands mentioned above were advised by Cushman & Wakefield which acted on 10 of the 13 deals, and on 89% (58,800 sq ft) of the space transacted, on Bond Street and Sloane Street this year.

Peter Mace, Head of Central London Retail, Cushman & Wakefield, said, "Bond Street and Sloane Street continue to hold their 'super luxury' status and experience robust demand for prime retail space. London is a natural choice for luxury retailers because of its position as a fashion hub and the rich mix of nationalities and tourists. Overseas shoppers are ensuring that luxury retail on these streets continues to thrive."

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