Renewed demand for prime retail space in the UK has seen New Bond Street in London win back its position as the world’s third most expensive shopping street.
The shopping district, home to some of the world’s most prestigious retailers such as Cartier, the watch brand, and Hermès, the bag maker, saw rents increase by 13 per cent year-on-year to $1,762 (£1,393) per square foot in the past 12 months.
That is according to a report by Cushman & Wakefield, the property services group, which ranked the most expensive shopping streets in the world by rent.
Cushman & Wakefield said the return of bricks-and-mortar shopping since the pandemic had renewed competition for prime retail space among retailers, pushing rents up.
Joseph Cheaney, the British footwear manufacturer, the French luxury brand Jacquemus, and Diptyque, the fragrance label, have all opened shops on the expensive London street.
Investors have also piled in to purchase freeholds. Richemont, the Swiss luxury goods group that owns Chloé, the fashion label, and Cartier, is expanding its property portfolio with the £82 million purchase of Boodles’ main store at 178 New Bond Street. Sir James Dyson’s Weybourne family investment firm acquired 126-127 New Bond Street from a private Hong Kong investor for £71 million.
New Bond Street was ranked as the fourth most expensive shopping street in the world last year, having fallen down the rankings in 2022.
The K-Pop star Mark Lee of band NCT outside the Ralph Lauren store in New Bond Street in July
MARK BOLAND/WIREIMAGE/GETTY IMAGES
The UK capital had struggled while EU rivals such as Paris and Milan saw an increase in international shoppers looking to take advantage of tax-free shopping incentives, which was scrapped in Britain after Brexit.
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This year the London street leapfrogged Tsim Sha Tsui in Hong Kong to take third place, despite the latter’s positive rental growth.
Via Montenapoleone in Milan, where rents have risen by nearly a third in the past two years, overtook Upper Fifth Avenue in New York to be crowned the world’s most expensive retail destination.
Via Montenapoleone has steadily climbed the rankings in recent years, reaching second for the first time in 2023. Rents rose 11 per cent to $2,047 per square foot in the past 12 months, while rents on Upper Fifth Avenue ($2,000) remained flat for a second consecutive year. Alongside continuing strong retailer demand amid constrained supply, Via Montenapoleone also benefited from the euro’s appreciation against the US dollar.
Robert Travers, head of Europe, the Middle East and Africa retail at Cushman & Wakefield, said: “These globally iconic locations are characterised by intense competition for space and extremely limited supply, even in challenging retail market conditions. Brands, from luxury to mass market, are doubling down on their physical stores in the top locations as competition for consumer attention drives the need for a superior shopping experience and product showcase.”
Cushman & Wakefield said prime retail destinations had mostly successfully weathered the storm precipitated by interest rate hikes to curb inflation in 2022 and 2023, which led to a rapid increase in the cost of living, weak consumer sentiment and sluggish economic growth. “Retail now stands to benefit from the gathering pace of interest rate cuts, economic recovery, easing cost of living pressures, and real wage increases,” it said.
