London tops Jones Lang LaSalle’s cross-border retail list
As meetings get under way for the second day of MIPIM, the market for retail property for sale and to let across Europe is in focus this morning. Jones Lang LaSalle has published a list of the top ten cross-border retail destinations in Europe, headed by London.
The firm says the UK’s capital attracts the greatest number of international retailers, and notes that retailers’ appetite for the best retail locations in London remains strong. James Dolphin, head of pan-EMEA retail agency at JLL, says: “Many top-tier retailers will accept flagship space in iconic locations and nothing less. This is maintaining or, in some instances, putting upward pressure on rents in super-prime locations, while more secondary locations are seeing higher vacancies and reduced demand for space.”
JLL notes that the US is the biggest exporter of retail formats, followed by the UK. In addition, European retailers including Desigual, Inditex, Fast Retailing, Bestseller, H&M, GStar and Superdry have all been in expansionary mode as they look beyond their home markets for more retail space and greater sales potential.
James Brown, head of EMEA retail research at JLL, says the constrained development pipeline for shopping centres is continuing to polarise the retail market, particularly in the more mature Western European markets. “The supply of truly modern space that is suitable for top-tier retailers remains tight in most markets,” he notes.
“We have identified certain European cities which have both strong market fundamentals and currently, a relatively low international retailer presence. In particular, the Scandinavian markets of Oslo, Helsinki, Gothenburg and Malmo, in addition to some UK, French and German regional cities. These will no doubt begin to feature on the radar for retailers seeking further international expansion,” he adds.
Meanwhile, DTZ has published a guide to shopping centres in Europe, providing city- and scheme-level data across 40 European cities “to form a view on future growth prospects for existing schemes and the potential for new developments”.
The firm says shopping centre stock across Europe currently totals 150m sq m, with France, Germany, Italy, Spain and the UK accounting for 60% of this figure. But the largest share of the shopping-centre development pipeline is in Istanbul and in cities in Central and Eastern Europe, DTZ notes, where consumer spending is expected to be above the 2% forecast annual average for the whole region for 2012-2016 – for example, 7.4% growth per year is forecast in Vilnus, 6.4% in Riga, and 3.4% in Helsinki, compared with minus 1.2% for Lisbon and minus 0.3% for Milan.
Magali Marton, head of CEMEA research at DTZ and co-author of the guide, says that in the more developed markets, future investment in shopping centres will be channelled into upgrading existing schemes. Martyn Chase, head of EMEA retail at DTZ, feels that despite the polarisation between prime and secondary centres, there is “huge potential” to invest in quality retail property and to prepare for new development when economic recovery comes. “Developers need to focus on good asset management, including selective refurbishment and redevelopment, to attract new retailers into the market,” he adds.
