London has recently been named as the number one destination for businesses in the retail sector looking to expand in Europe. The accolade comes in stark contrast to somewhat negative predictions for the market after Brexit.
The data, which was collated by the commercial property consultancy CBRE, revealed that over 2 billion worth of retail-based property investment took place in the capital, with no fewer than 65 different retailers opening for business in the previous year.
The retail capital of Europe
The news firmly places London on the map, with numerous international retailers keen to take a slice of the current industry boom.
On a global scale, Hong Kong was the only area to place higher than the city, with 87 new retailers setting up shop in the same 12 month period.
US investors were largely responsible for inward investment in London. This suggests that, although narrowly losing out to Hong Kong in terms of retailer pull, the capital of the UK still remains the key location for retailers seeking to conquer Europe, Africa and the Middle East.
Retail demographics: the industries deciding to move in
Coffee chains were the largest type of retailer to make London home in 2016/17. Despite the market already being heavily cornered by well-known high street brands, a market for more niche outlets has fuelled a rush to satiate London’s more discerning coffee lovers.
Clothing stores were the most popular type of outlet for expansion, with specialist clothing trends and the demand for mid-range fashion outlets attributed with an 18 percent increase of overseas investment last year.
A spokesperson for CRBE, the company responsible for conducting the research, stated that London was doing “very well” in comparison to global cities of similar size and stature – despite the business rates revaluation which has impacted a large number of city-based retailers.
“Retail brands still continue to see the importance” of a high street store presence in London, the spokesperson added.
Tourism feeding retail
London has witnessed record numbers of tourists in recent years. This, combined with the weakness of the pound in a post-referendum climate, has meant that retailers have witnessed increasing sales figures on the back of international visitors.
Exciting times for the retail sector
With the market not looking to slow down anytime soon, retailers are becoming increasingly more selective about property location. Whereas once the attitude of many retail companies was “any presence is better than none”, competition for prime real estate in the centre of London is beginning to hot up.