Luxury Retail Rental Presence in Europe Is Growing Twice as Quickly as That of High Street Brands, According to New Report
On luxury high streets in Europe, prime rental growth exceeded mass market-facing streets, as per Cushman & Wakefield’s European Luxury Retail report. The report analyzed 107 openings on 20 luxury retail streets across 12 European nations last year. Luxury streets saw 3% annual rental growth in 2023 compared to the 1.6% average growth for all high streets. Rental levels on luxury high streets have rebounded to end-2018 levels, while overall high streets remain 10% lower.
London continues to be a key player in luxury retail, with New Bond Street seeing eight openings last year. Luxury retailers focus on prime locations, leading to near-zero vacancy rates. Robert Travers, from Cushman & Wakefield, noted constraints on retailers securing space, emphasizing the importance of physical stores post-explosive growth years. Luxury brands are expanding into hospitality sectors like hotels and restaurants to integrate their brands into clients’ lifestyles.
European luxury retailers are also establishing presence in luxury resort towns. After an anticipated slowdown in sales growth, retailers will concentrate on core locations and enlarge store sizes. For example, Dior’s revamped mega store in Paris offers a range of luxury experiences for VIP guests, reflecting the trend toward expanding store offerings.
LVMH and Kering have been acquiring real estate assets in Paris near luxury retail locations for strategic positioning. LVMH and Kering made significant acquisitions in 2023, while the Swatch Group acquired properties in London. Cushman & Wakefield predicts further rental growth on European luxury streets in the coming years.