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Prague has attracted all top 20 retailers with the highest expansion policies

Prague has the most developed high street market in Central Europe. Its prime high street locations, Na Příkopě. Václavské naměstí and Pařížská for luxury segment, are a prime target for international retailers wishing to enter the Prague market. Retailers focus on prime high street and shopping centres alike, but as supply on the main high streets remains limited, retailers are considering the surrounding side streets, such as 28. října, Havířská and Železná.

Prague’s high street market is currently well balanced with the core of its retailers coming from the mainstream segment with approximately 46% of the units. Premium brands form about 29% of the mix whilst luxury brands account for 25%. From the top 10 most attractive European cities for retailers, Prague has the highest share of mainstream brands. With the growing purchasing power of its inhabitants and regular flow of high spending tourists, it is expected that the number of premium and luxury brands will grow in the future.

Na Příkopě and Václavské náměstí – the ‘Golden Cross’

Na Příkopě, which offers approximately 60 retail units along its 500m length between Na Můstku and Náměstí Republiky, is the country’s most popular high street retail destination for mainstream shopping. It represents a mix of mid-market brands, which form almost 60% of the streets retail offer, as well as premium brands. The most attractive part of the street, which also has the strongest footfall and hosts a number flagship stores, runs from the bottom of Václavské náměstí, Na Můstku to the Myslbek Shopping Gallery. Demand for space in this section of the street exceeds supply and vacancy is approaching 0%.

“Over the last five years, the character of Na Příkopě Street has gradually undergone a shift in its retail offer. Fashion brands selling clothing, footwear and accessories are taking dominance over the street and have increased their share on the tenant mix to 45%. On the other hand, due to higher demand which led to increasing rents, we have registered a decrease in the number of restaurants and cafés. In 2008, cafés and restaurants formed almost 20% of the streets tenant mix, whilst in 2013, this share decreased by almost a half. Compared to 2008, there are more banks and jewellery stores today but fewer souvenir shops and perfumeries,” explains Blanka Vačkova, Senior Research Analyst at JLL.

The second most sought after retail location for mainstream brands is Václavské naměstí, which is the home to large flagship stores, banks, department stores and hotels. It is over 700m long and currently offers up to 70 retail units of varying sizes. The lower part of the square, connected to Na Příkopě and often referred to as Golden Cross, is valued higher and preferred by retailers. It benefits from a significant footfall which has further improved with the introduction of a pedestrian zone back in 2012. Compared to Na Příkopě, Václavské naměstí offers a higher share of cafés, restaurants and fast-food outlets, and has a higher share of mainstream brands.

Over the last 12 months, new market entries on Na Příkopě include Tommy Hilfiger, Deichmann, Bershka and Weekend Max Mara. On Václavské naměstí, the major new opening for 2014 was C&A who opened their new flagship store in the Diamant building on April 10th. As is visible from the following table, out of the 20 top retailers that have the highest expansion ambitions and the broadest coverage in leading European cities, Prague was successful in attracting all of them.

“Out of these 20, the majority of brands have secured a location on Prague’s high streets. The preferred location is Na Příkopě, with half of the top 20 retailers having opened their flagship stores on this street. Among the most recent openings are Tommy Hilfiger and Max Mara Weekend,” says Sylvie Samadi, Head of Retail Agency JLL.

Top 20 Retailers with the highest coverage of Europe’s key markets and their presence in Prague

Source: Jones Lang LaSalle (Destination Europe 2013)

Rental levels

Due to the fact that Prague belongs to the top ten most attractive locations for international retailers in Europe, prime rents in the centre of Prague command the highest level among CEE cities. For a 100 sq m unit on Na Příkopě, rents are at a level of €2,160 per sq m / per year (€180/sq m/month). Between 2008 and 2013, prime rents in this location have registered and increase of 20%. On the other hand, prime rents on Václavské naměstí for a standard unit of a100 sq m, are reaching €1,200 per sq m / per year (€100/sq m/month). “Although Prague‘s rents are the highest within CEE, on a  European comparison, Prague still represents a competitive environment for entering the market. The most expensive European high street locations are Avenue des Champs Elysées in Paris, followed by Oxford Street in London and Tverskaya in Moscow,” concludes Beatrice Mouton, Head of Retail Agency CEE at JLL.