London is Europe’s most preferred destination for international retailers
Among European cities, London remains the most sought after destination for retailers wishing to expand their operations. Globally, London is ranked second only to Hong Kong which has retained its position as the world’s most popular destination for retailer expansion attracting 87 new retailers, according to CBRE’s annual report ‘How Global is the Business of Retail?’.
Hong Kong is closely followed by London which has witnessed the second highest presence of new retail entrants, with a total of 65 international retailers opening stores in London. Retailers such as Nars, New Balance and Dyson have all opened new stores in London recently, helping it to maintain its position as a global retail powerhouse.
The latest CBRE report which tracks and identifies the target cities for international retailers in 2016, found that the majority of the new retail brands that have opened in London originate from the United States, demonstrating that London continues to be a magnet for international retailers who want to establish their brand before expanding into Europe, Middle East and Africa (EMEA). Furthermore, 2016 also set a record for the amount of money invested in retail property in London with £2 billion being spent by the end of last year.
“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. ” said Hugh Radford, Chairman-London Retail, CBRE.
“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.” said David Close, Senior Director, Cross Border Retail – EMEA, CBRE.
Of the new brands arriving in London, 25% have been Mid-Range retailers, with luxury retailers gravitating towards the Mayfair area and making up 20% of all new retail entrants.
London is followed by Dubai who welcomed 59 new retailers. Doha moved up six places from last year’s new entrants ranking to take fourth place with 58 new retail brands and Tokyo being the fifth most sought after market with 48 new entrants to make up the top five most targeted retail cities globally. Most notably, Paris has jumped to 7th place (from 20th last year) attracting 36 new retailers as the French capital continues to attract international retailers due to its strong tourism market and stable economy. Of the new retailers to Paris 33%, are specialist clothing retailers such as Jordan, Rip Curl and Athlete’s Foot who are all targeting the large number of Parisian millennials. Moscow and Vienna also featured in the top 10 target markets with 33 and 29 new entrants, respectively.
European cities are the preferred new destination for international retailer expansion attracting 43% of new retail brands in 2016, up from 36% on the previous year. This is largely attributed to European retailers redirecting their focus on expansion in their domestic markets rather than in locations where currencies have become more expensive.
CBRE’s latest study also found that international retailers targeted a wide range of new markets in 2016. Of the cities surveyed, 89% saw at least one new international brand. Retailer activity increased by 2% in 2016, a decline from 3.1% registered in the previous year, and indicating a slowdown in retailers’ global expansion plans. The vast majority of the top 15 cities targeted by retailers for the first time last year were mature markets with only one up-and-coming market, the Croatian city of Split, ranked among the top destinations for expanding retailers last year.
Globally, the report revealed that coffee shops and restaurants to be the hottest retail sector for expansion into new markets, with retailers in that category accounting for 22% of all expansion at city level. Next in line was specialist clothing stores (18%) and mid-range fashion stores (17%).