London top launchpad for EU store expansion says CBRE, Hong Kong leads globally
Brexit may be looming but London remains the top springboard into Europe for retailers launching an expansion programme, new figures from commercial property consultancy CBRE have shown. CBRE said 65 new retailers opened there last year with the city seeing over £2bn worth of of retail property investment.
But Hong Kong was the top destination globally. Despite its well-publicised retail sector challenges, 87 new names opened there in 2016 as it continued to be seen as a must-be-there shopping destination by retailers.
London’s advantage came as large numbers of US names set up shop in the UK capital and it continued to benefit from being seen as the best stopping off point before expanding into the EU. They opened new stores despite major headwinds such as higher property taxes.
While coffee shops were the top category of stores to be opened at 22%, specialist clothing stores and mid-range fashion stores came next, accounting for 18% and 17% of foreign investment during 2016. And luxury retailers across categories accounted for 20% of all openings.
Given that most opening decisions will have been taken before the unexpected results of the EU vote, it remains to be seen whether London can retain its springboard status when running a European division from the UK possibly becomes more difficult after the EU exit deadline of 2019.
That said, the rise in tourism since the EU vote’s result helped to drive the pound’s value down means London will remain a key city for any business targeting tourist traffic, as well as the most affluent local shoppers.
Meanwhile, Dubai was third on CBRE’s list with 59 openings by new names and Doha was fourth with 58, the pair highlighting the importance of Middle Eastern markets even though persistent low oil prices have dented wealth in the region. CBRE said Dubai’s openings included major athleisure brands Under Armour, Jordan, New Balance and GapFit. And just as London is a first step into Europe, brands are using Dubai as a first step into the Middle East, CBRE said.
But Doha was only one opening behind Dubai, suggesting it is turning into a major rival having transformed its retail market in recent years with the opening of a number of large malls.
Next on the list were a clutch of key ‘global’ cities including Tokyo (48 new brands), Singapore (46), Paris (36), Moscow (33), Toronto (30) and Vienna (29).
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