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Experian & Jones Lang LaSalle Launch Joint European Downtown Retail Rankings

London and Paris Top the European Shopping League, Prague is 13th

Experian and commercial real estate firm Jones Lang LaSalle have launched the 2009 European Downtown Retail Centre Rankings, which for the first time show the relationship between consumer spending in European cities and prime retail rents. Experian has analysed levels of retail expenditure for all the major European destinations alongside rental data from Jones Lang LaSalle. For each city, the rankings take into account cross border spend, spend-per-head differences by country, the retail offer within each city centre and the effects of competing out-of-town centres. The new rankings have been designed to equip investors, developers and retailers with crucial insights into the best downtown European location opportunities.

London and Paris are clearly the place to be in Europe, as the cities occupying the first and second positions in the rankings in terms of consumer spend have some of the highest prime rents. Italy, Germany and Spain all have two city centres each that make the top 10 of the European Rankings. Moscow is the only city in Central and Eastern Europe to break into the top 10.

Rome, in third place, edges Milan as the top Italian location, largely thanks to its importance as a tourist destination and the relative lack of competition to its downtown retail offer. In both cities rents for super-prime units can reach levels commonly found in London and Paris, although their general rental level is much lower.

The dominance of London on the UK retail landscape is evident, with Glasgow being the only other top 20 entrant. In Germany, whilst overall spend is highest in Berlin, rental levels are much higher in Munich and Frankfurt.

Locations from Central & Eastern Europe account for 10 per cent of the top 50, demonstrating that despite a boom in retail development over the last few years, downtown areas still generally lack the quantity of retail stock found in more mature Western European cities. This shortage of retail in some downtown locations is a result of development trends, which only started in the mid 90’s, that focussed almost exclusively on shopping centres in non-central locations.

Relative disparities in spend per capita are also a factor in the limited number of CEE cities entering the top 50. Despite this, Prague, Istanbul and Budapest all rank highly thanks to their stronger high street and downtown shopping centre offer.

“In Central Europe, Prague is unsurprisingly leading the way, being an attractive tourist destination with historical buildings, pedestrianised streets and a compact city centre. Its unique setting has favoured the development of a prime retail high street along Na Prikope & Vaclavske namesti (home to high profile international brand flagship stores) and an upmarket street along Parizska, cradling luxury brands such as Hermes, Louis Vuitton, Ferragamo, Cartier, Christian Dior, Escada, Dunhill and Hugo Boss for example. Budapest and Warsaw are starting to observe a similar pattern. In Budapest, Vaci Utca is home to international brands whilst the luxury brands such as Louis Vuitton, Gucci, Armani and Burberry have favoured Andrassy's imposing architecture as a safe haven for its exclusive merchandise. In Warsaw, the prime high street is concentrated along a small strip of Marszalkowska whilst the upmarket brands such as Emporio Armani, Ermenegildo Zegna or Burberry have selected the discreet and classy surroundings of Plac Trzech Krzyzy for their boutiques or Moliera Street, in the neighbourhood of the National Theater, where Valentino and Ferrragamo recently opened. In Bucharest, Calea Victorie remains a kaleidoscope host to both the international and luxury brands.” - comments Beatrice Mouton, Head of Retail CEE, Jones Lang LaSalle.

There is little to separate many of the locations outside the top 25, with Warsaw (52nd) and St Petersburg (65th) for instance having a similar catchment spend to higher ranked cities such as Antwerp (50th) and Bordeaux (46th). They only fall short of the top 50 due in part to the comparatively lower downtown retail space provision and heightened competition from out-of-town shopping centres. Not forgetting of course that there is stronger overall competition from the large number of mature downtown locations of secondary Western European cities that represent 56% of the top 50.

James Dolphin, head of Pan-European Retail Agency at Jones Lang LaSalle said: “The Euro Rankings provide a major step forward in establishing and comparing the size of the retail spend in major European city centres.  This is a crucial first base in assessing the opportunity for retailers, developers, and investors. But it’s not just about size: understanding rental levels is equally important.  By combining both and applying our specialist retail agent’s knowledge and expertise in each country, we can better understand the quality of the retail environment, occupier demand, availability of space and ultimately provide a guide to helping determine potential turnover.  As ever, it is about local expertise and fully understanding the unique supply and demand characteristics in each location.”