London attracts most international retail brands, CBRE shows

London is home to more international retail brands than any other city in the world, according to the latest edition of How Global is the Business of Retail by global property advisor CBRE.

London continues to be a magnet to new market entrants with 31 new retailers entering the UK last year. Notable new retailers include J.Crew and luxury retailers Isabel Marant and Tom Ford who opened their first standalone stores. Other cities in the top 10 include Beijing, Moscow, Shanghai, Frankfurt, Taipei and Singapore.

The 2014 report which tracks retailer’s movements in 2013, found that the overall footprint of global retailers at country level grew by 1.7%. Over half of retailers (51%) are now present in all three major global regions, The Americas, Europe Middle East and Africa (EMEA) and Asia Pacific, a slight increase on the previous year.

Paris is the world’s hottest global retail market attracting 50 new brands last year, while France is ranked as the leading country for new entrants, researchers found.

Eric Eastman, executive director, luxury goods & international retailers, CBRE said: “London now attracts more international visitors that any other capital in the world. A flood of brand-hungry overseas shoppers, many from China, has swept into Central London. Space demand from luxury and international retailers has moved into hyperdrive as a result.

“There are simply too many global brands now for the traditional pitches in London to absorb them, which is why we are starting to see lettings to Dior and Chanel in Covent Garden and Philip Lim and Carven in Brompton Cross.”

Retailers focused on fewer and larger markets in 2013 with 19 of the top 20 target cities considered mature markets compared with only 14 in 2012 . Over 70% of the survey cities saw at least one new entrant throughout the year (compared with 81% the year before); however, the top 20 target markets saw a 30% rise in new entrants.

The number of new entrants at city level was up by 25% year-on-year, with an increasing number of retailers crossing borders to grow their businesses. Paris rose from seventh place in the list of the cities most attractive to retailers welcoming 50 new entrants over the year, including 10 new Luxury and Business Fashion Brands. Paris benefitted from three new shopping centres in 2013, but it was the prime high street locations that attracted the most global brands. Competition on these high streets between luxury brands is fierce due to surging demand from tourists, especially from China.

France also topped the table of the hottest countries ahead of Japan and Hong Kong. France, which moved up 12 places, has seen a renewed confidence in the market. Paris was the main point of entry for many retailers and has seen rents increase to decade highs due to significant interest from global retailers for the limited amount of available prime space. Paris was not the only target market; retailers also chose nine other French cities for their first store.

Tokyo is second as the most attractive city for global retailers, seeing double the number of new entrants during 2013 (48) than it did in 2012, reflecting renewed confidence in the economic prospects of Japan. Half of all new entrants (24) came from the US while a further 18 were from Europe. Hong Kong and Abu Dhabi were the third and fourth ‘hottest’ markets with 43 and 35 new entrants respectively.

Jose Luis Martin, EMEA senior director of cross border retail, CBRE, said: “The improving economic prospects in Western Europe and North America is leading global retailers to refocus their expansion plans on mature markets and the world’s major retail destinations, with Paris, Tokyo, London and Berlin the top targets. Retailers have also turned their attention to recovering European markets and Asian and South American cities where they are still under represented.

“Global shopping centre development is also at an all-time high and is providing the opportunity for retailers to enter new markets, particularly in Asia, Latin America and Eastern Europe. Owners are putting sizable resources into revamping, extending and freshening up their existing centres and securing major international brands is a key part of this strategy.

“The growth of the online environment has also elevated the importance of the brand – not just among luxury retailers, but across the retail spectrum with consumers seeking out aspirational brands as well as high street and value offerings, and this is driving demand for new stores.”