MAPIC 2015: Retailers have grabbed nearly 20% of all units on London’s Bond street as a flurry of purchases by luxury brands saw shops push out more traditional landlords.
Just half of these were for occupation, according to research from Savills, with the likes of Chanel, Graff Diamonds, Fenwick, Richemont, Hermès, MaxMara and Louis Vuitton investing in units that they do not currently occupy.
One, fashion brand Bestseller, has invested in the street even though it has no store there.
Factors including control of the building, security of positioning and protection from rental growth have made stores dig deep into their own tills for bricks and mortar. Rob Hargreaves, director of central London retail at BNP Paribas Real Estate, said: “Purchasing freeholds occupied by competitors is also a tactic which can be used by retailers which can then seek to gain occupation via 1954 Act rights. Some are prepared to wait a significant length of time for this – 15 or 20 years is not long for a brand established in the 1700s.”
Julian Stocks, partner at Deloitte Real Estate, says: “It can be argued that some of the recent deals are not real estate investments in the traditional sense, as the retailer is essentially buying the hoardings rather than the property.”
So are these isolated incidents or the start of a trend?
No, believes David Harper, chief executive of retail agency Harper Dennis Hobbs. And he should know: he has been involved in many of the Bond Street deals. “All the principal brands have bought on the street, so most are now taken,” he says.
That doesn’t mean we can’t expect a couple more deals next year, though. NFU’s Standbrook House at 2-5 Old Bond Street, W1, is tipped to go before the end of the year. Whether the buyer will be a retailer remains to be seen.
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