Cream of the Crop
With retail venturing into many new and interesting avenues, as the wants and needs of customers continues to evolve, the destinations that are home to these behemoths of retail must keep pace with an ever changing market. Here, RLI takes a look at some of the key retail destinations around the world, offering you an overview of why they are considered worthy of a place on the top tier of modern retail locations.
Spain’s second largest city and the capital of Catalonia, Barcelona is the county’s most visited province. It is at the centre of a dynamic metropolitan area which comprises a population of 5.5 million inhabitants. The principal shopping location in the city is around Plaza de Catalunya, home to many Spanish brands as well as international retailers. Barcelona is a fashion-conscious city that caters to both tourists and the local shoppers. Major retailers in Barcelona include Zara, H&M, Desigual, Adidas, Nike, Chanel, Gucci, Louis Vuitton, Burberry, Dolce & Gabbana, Pull & Bear, Massimo Dutti, Intimissimi, Bershka, Mango, Apple, El Corte Ingles and Replay. Key areas of the city include the Portal de I’Àngel, Pelai, Les Rambles and the Rambla Catalunya. The Finestrelles Shopping Center in Esplugues de Llobregat is one of the newest centres to open in the city, after opening its doors on 14 November last year. The commercial and leisure offerings of the centre are spread among 110 stores over three fl oors, with a total area of 39,250sq m.
China’s national capital outperformed all other Chinese cities again in terms of total retail sales of RMB 1174.77 billion in 2018. The current stock of shopping centres is 6.6 million square metres of GFA. As well as having a resident population of 21.70 million, the Beijing retail market also benefits from being a centre of government and tourism. Gifting, which is deep-rooted in Chinese culture, has historically been a major factor boosting the sales of luxury brands, however in recent years this has been restricted by government. Over 200 million tourist nights in Beijing also provide a boost to retail sales. The key retail streets and areas include Xidan, CBD, Wangfujing and Sanlitun, with major retailers present in the country including Apple, Zara, H&M, Gucci, Urban Revivo and Prada. The major retail centres include Chaoyang Joy City, Tai Koo Li and China World Mall.
A major hub within Germany, Berlin ranks highly for lifestyle, and is known for its hipness, creativity and tolerance. The city has developed Germany’s largest concentration of co-working spaces and innovation hubs. Berlin is currently top of mind for many investors in every sector of the real estate market, in the expectation that rents can only go up, particularly given their affordability compared with other mature German city locations and other major capital cities such as Paris. However, the profile of retailers must also shift upwards to help drive higher retail rental prices. In Q4 2018, Swedish alternative fashion retailer Our Legacy opened its first Berlin store at Tucholskystrasse, in the Mitte neighbourhood, on the ground floor of a five-storey residential building. As a shopping metropolis, Berlin takes advantage of a vast natural catchment area with more than 5 million inhabitants. Its status as a European centre of tourism additionally draws external visitors, counting nearly 33 million tourist overnight stays in 2018, approximately 46% of whom came from abroad.
A third of the world’s population is accessible within a four-hour flight of Dubai and two-thirds within eight hours, making the city a well-placed strategic hub for regional and global investors. The Emirate’s population has increased by 134 per cent in the last decade, rising from 1.3 million to 2.4 million. Add to this the government’s commitment to infrastructure investment (preparations for Expo 2020 include the expansion of the metro, airport and road network) and improvements in market transparency and Dubai is ensuring it can compete with the world’s top tier of global cities. Over the past two years, Dubai has risen in the ranks to become the No. 1 market for international retailer presence with 62 per cent. Over the next three years alone, more than 1.5 millon square metres of new retail space could be delivered to the Dubai market, adding roughly 50% to the existing inventory. This amounts to roughly 70 per cent of the total future retail supply for the UAE over the same time period, and underlines the massive real estate market transformation that is occurring in the build up to Expo 2020.
Hong Kong has been the most targeted retail hub for the past three years, attracting 86 new international brands in 2017. Foreign retailers are attracted by Hong Kong’s market maturity to create brand awareness in Asia Pacific, as well as the geographical advantage to facilitate their long-term expansions into China. Underpinned by the popularity of dining out, coffee & restaurants accounted for two-thirds of Hong Kong’s new entrants in 2017, on par with the previous year. The cosmetics sector continues to grow, with Sephora, a multi-brand cosmetics retailer re-entering the Hong Kong market after they closed their flagship store in Mong Kok 10 years ago. The retailer has pre-leased a 4,000sq ft store at IFC Mall in Central. Meanwhile internationally, French luxury fashion house Hermes has announced a plan to launch their beauty collection in 2020. It is projected that 2019 will be an average year for Hong Kong’s retail market, lacking the stimulus necessary for robust growth. Fortunately, the market fundamentals are expected to remain relatively stable and will support modest growth in rents in both the prime street shop and shopping centre segments.
A city known around the world because of its unique location that spans across two continents. The strategic location bridges both Asia and Europe which has made it a regional powerhouse and a hub for international diplomacy, business and finance. A city that never sleeps with its blend of ancient history and modern life, the city is separated by the Bosporus, which connects the Black Sea to the Marmara Sea, and is the busiest shipping lane in the world. The city is home to the oldest and largest shopping centre in the world, the Grand Bazaar. The centre is home to over 4,000 stores, with some of them dating back to 1453. Istanbul currently has 115 shopping centres open and operating, with another 17 approved or in construction that will open before the end of 2019.
Due to a slightly unstable environment in recent years because of, you’ve guessed it, Brexit, some major brands have shut up shop in the last few years, leading to a slight decline in the presence of international brands in the market. In spite of this, new entrants continue to target London year after year. Despite the uncertainty associated with Britain’s decision to leave the EU, London remains popular among global brands, particularly for those choosing a market for their first European store. Three examples of this in recent times are Canada Goose, Sonos and Nappa Dori. A major recent opening in London was the ICON Outlet at The 02, the 210,000sq ft premium urban outlet developed by AEG and Crosstree Real Estate Partners which opened in October. The ICON Outlet defines urban outlet malls, and brings a shopping experience to the world’s number one entertainment venue for the very first time. Designed by CallisonRTKL, the project boasts a premium-led offer, and a brand mix that brings consumers the most relevant, inspiring fashion, lifestyle and accessory brands.
The entertainment capital of the world, Los Angeles is a globally recognised travel destination for millions of tourists each year. Firmly entrenched as the western gateway to America, LA’s economic diversity is matched only by the city’s unrivalled cultural diversity, with more than 150 languages spoken amongst the county’s 10.3 million residents. From Santa Monica to Pasadena, Los Angeles offers retailers an array of high-street submarkets. Massive investments in technology and transit-oriented development infrastructure present a tremendous upside to retailers seeking to expand their brands. The dynamic transformation of Downtown Los Angeles offers retailers the unique opportunity to seize market share in the nations’ second largest consumer market. The important retail areas in Los Angeles are West Hollywood, Santa Monica, Pasadena, Beverly Hills and Downtown LA. The main shopping centres in the city are Westfield Century City Mall, The Bloc and Beverly Center, which completed a $500M renovation in late 2018, transforming the 1980s shopping centre into a modern day gathering place with all components of the new type of mall.
The Miami trade area is a strong market with low vacancy rates across the board, rising lease rates in all of its submarkets and rampant developments all over the county. Miami’s growing position globally as the “Capital of the Americas” serves to further enhance the retail market. The city has risen to become a top-five area among retailers for expansion or entry given its historically healthy sales performance, growing tourist base, and incredibly strong – but – difficult to track seasonal resident factor. Average per capita income has increased 27.3 per cent in the Greater Downtown area compared to 27 per cent in the City of Miami. Once known as a retirement haven, Miami now ranks as the 15th youngest city (out of the top 50 U.S. cities) in terms of average age. This trend is largely driven by Millennials.
Remaining the most sought after location in Italy, Milan is top of the pile in both the luxury and mass market sectors, and has further improved its standing among the top high street locations worldwide. A distinctive feature of Milan, the famous so called “Quadrilatero della Moda”, represented by Via Montenapoleone and adjacent streets, is characterized by the high concentration of luxury brands, featuring approximately 300 top domestic and international brands. Recognized worldwide, these streets have achieved global status. Adjacent to Linate Airport, the 185,000sq m GLA Westfield Milan project by Arcus Real Estate and Unibail-Rodamco-Westfield will include 300 shops, a luxury village, over 50 bars and restaurants overlooking a lake which stretches over 20,000sq m, a multiscreen cinema, a multi-purpose hall, a play area and an 80,000sq m park, along with a hypermarket of 22,000sq m spread over three levels and 10,000 car parking spaces.
Situated on the Moskva River in western Russia, Moscow is the nation’s cosmopolitan capital. Moscow is the major political, economic, cultural, and scientific centre of Russia and Eastern Europe, as well as the largest city (both by population and by area) entirely on the European continent. The city welcomed 36 international brands for the first time in 2017, while Russia hosted 27 new international brands in in 2018, of which 81 per cent of these opened their store in Moscow. Despite a high turnover and the exit of several brands, interest in Moscow remains high. 2018 completions of shopping centre space were down to a 16-year low of 192,000sq m, and 50 per cent of this space was hoovered up by two projects: Kashirskaya Plaza and Pushkino Park. The availability of new-build space has been declining for years, 24,000sq m in Q4 2018, down 25 per cent year-on-year. However, completion volumes are expected to increase in 2019. Notable projects currently in the pipeline include Salaris at 105,000sq m, Dream Island at 60,000sq m and Aquarelle Pushkino at 48,000sq m.
Serving as the financial capital of India, Mumbai is the highest GDP contribution in the country, which currently stands at six per cent. Mumbai is the second most populated city in the country with a population of approximately 22 million. The retail market is highlighted by smaller disorganised retailers or corner shops retailing various commodities ranging from food to clothes and other household items, as is the case across most cities and towns in India. Brands such as H&M, GAP, Aeropostale, Scotch & Soda, Muji, Massimo Dutti, Jo Malone, Longchamp, Coach, Royce Chocolates, Hackett, Onitsuka Tiger, Hamley’s and Simon Carter have all entered the Mumbai retail market. New entrants tend to open stores in malls first, within prominent retail developments, then subsequently establish a footprint on major streets. An upcoming development to look out for in Mumbai is Oberoi Realty – Worli, which will cover five million square feet and is expected to be a mixed-use scheme with commercial, retail and hospitality. The residences of the scheme are to be managed by The Ritz Carlton Hotel and the mall is going to host a collection of exclusive retail luxury brands.
A major retail hotspot in an affluent area of Germany, the purchasing power on display in Munich and its surrounding regions are unmatched in Germany. Retail on Munich’s high streets is focused in on the city’s CBD, which is located in the vicinity of the world famous Frauenkirche and Viktualienmarkt, where shoppers can find everything from mass consumption to luxury goods. With this in mind, it will come as no surprise to learn that the city is often the first choice for international retailers who are looking to branch out into the German market. Two excellent examples of this are H&M in regard to their new format Arket and Canadian retailer Lululemon, both of these opened their first German stores in the Bavarian capital. Given Munich’s historic CBD and the fact that most streets are for pedestrians only, the shopping atmosphere is very relaxed and attractive. Local shoppers enjoy and value the CBD’s retail scene as much as visitors from abroad. Furthermore, Munich is a hot spot for tourism, with nearly 50 per cent of hotel stays being accounted for by foreign visitors, which strengthen to city’s global appeal.
What else can you say about New York City that hasn’t already been said? Possibly the most iconic city in the world, for many more reasons than just retail, New York is a beacon of light, sound, creativity and cosmopolitanism and the city sets the bar for all American markets and sets the tone for the US economy. From experiential flagships in Midtown to social media-friendly SoHo pop ups, the New York store has become as much a marketing channel as a place to buy, and offering access to an exclusive experience is becoming just as important as offering access to an exclusive item. New York retailers are utilising technology to turn the physical store into a dynamic, personalised shopping experience, empowering store associates to provide a higher level of service. Home to a multitude of key retail areas, New York is home to Times Square, Madison Avenue, Lower Manhattan, Flatiron and Fifth Avenue to name a few. Major retailers in the city include Sephora, Swatch, M&M’s World, Levi’s, Skechers, Swarovski, Hard Rock Café and many more. New entrants to the city include Coty, UNTUCKit, Rebag, Jennifer Furniture and Zimmermann among others.
Regarded in many quarters as the fashion capital of the world, Paris is also the retail, administrative and economic capital of France, accounting for nearly 20 per cent of the French population and 30 per cent of national GDP. A main growth factor for the city in recent years is new luxury hotel openings and re-openings in the city, visitors from new and developing countries are fuelling this growth in the luxury sector. This is shown by certain significant openings and department stores moving up-market. Other recent movements have accentuated the shift upmarket of areas in the Right Bank around Rue Saint-Honoré (40 per cent of openings in 2018), rue du Faubourg Saint-Honoré, and Place Vendôme after the reopening of Louis Vuitton’s flagship in 2017. The Golden Triangle is back on the luxury market with some recent and upcoming openings on the Champs-Elysées and Avenue Montaigne. In the F&B sector, a few high-end specialised retailers have enlivened markets in Paris, since Lafayette Gourmet has reopened on boulevard Haussmann, La Grande Épicerie in ruede Passy replacing Franck & Fils department store, and more recently the new concept Eataly in Le Marais.
Second only to Milan in the Italian market, Rome city centre has a long history of retailing and maintains its appeal through its enduring tourism market. The city is recognised across the globe as one of the prime high street locations in Italy and ranks within the top ten high streets in Europe. The luxury segments of Rome are concentrated on the Via Condotti and part of Piazza di Spagna. The medium-high end retail market around Via Condotti and Piazza di Spagna is mostly pedestrian-only and comprises around 400 stores. Between 2005 and 2015, the city underwent a huge development pipeline in its peripheral locations, with around 700,000sq m GLA built and it now has 46 existing retail schemes, including the two super-regional shopping centres Porta di Roma and Roma Est and the largest retail park in Italy, Market Central Da Vinci. While development has now understandably slowed, the new shopping centre Maximo Shop & Fun is expected to be open by the end of year, adding 60,000sq m of prime retail space to the south western quadrant of Rome.
Whilst Shanghai has long been an oasis of international shopping and the location for the headquarters of many a Chinese retailer, it is now increasingly becoming a global financial and economic centre. Retail sales for 2017 reached ¥1183.03bn. With a population of just over 24 million and among the highest disposable incomes in China, Shanghai is the largest retail market in the country by retail sales. Tourism also adds to the already high levels of purchasing power. The current stock of shopping centres and department stores in Shanghai is roughly 16.16 million square metres. Key retail streets and areas include East Nanjing Road, West Nanjing Road, Middle Huaihai Road, Lujiazui and Xujiahui. Key shopping centre sites Plaza 66, KKRI Taikoo Hui, Kerry Centre, Grand Gateway, International APM Mall, IFC Mall and Raffles City. Important retailers in the city include Zara, Nike, Dolce & Gabbana, Gucci and Hermes, with new entrants including Lego, Dyson, Victoria’s Secret, Massimo Dutti and Viviennewestwood.
A major business and retail hub in Southeast Asia, Singapore boasts one of the most preferred destinations for multinational corporations as well as global brands looking to establish their presence in the region. In the age of e-commerce, the sea change turning shopping centres into multi-experiential retail destinations continues. Malls are filling up vacant spaces with more activity and entertainment-oriented tenant mixes. This not only keeps occupancy levels up but also leads to greater footfall traffic. 313@Somerset recently introduced Singapore’s first cosmic bowling alley by K Bowling Club, creating a multi-activity bar and kitchen concept with an array of entertainment offerings such as bowling, darts, karaoke and a games arcade. Major projects in the pipeline include the Punggol Digital District, which is currently estimated to be 146,000sq m in size and will open its doors in 2023.
The state capital of New South Wales and the most populous city in Australia and Oceania, Sydney is located on Australia’s east coast and the metropolis surrounds the world’s largest natural harbour. Pivotal to Sydney’s economy is tourism, according to the census, 34 per cent of the population reported to have been from overseas, representing many different nationalities and making the city one of the most multicultural cities in the world. In the year ending June 2017, Sydney received 9.5 million domestic visitors and 3.7 million international visitors. On average, the tourism industry contributes $36 million to the city’s economy per day. Examples of prime retail locations in the city are George Street, Westfield Sydney and Pitt Street Mall in the CBD and Westfield Bondi Junction. Barrangaroo is the most important reinvention of Sydney’s historic centre for decades. The precinct is a globally significant, 22-hectare, more than $6bn waterfront renewal project that redefines the western edge of Sydney CBD’s waterfront. It will be a lasting legacy of 21st Century urban renewal for future generations when it opens in 2024.
Tokyo is the very definition of a metropolis. Twenty-three wards, 39 municipalities, and 13.6 million people join to form Japan’s capital. If you include the three surrounding prefectures of Kanagawa, Saitama and Chiba, and you have a population base that exceeds 36 million people. A significant target for brands in recent years, the Tokyo retail market is mainly driven by cross-regional expansion of retailers. Coffee & restaurants was a driver of growth in Tokyo and almost half of new entrants in 2017 came from the US or Europe. Ginza Six, a newly completed high-end shopping mall, provided the opportunity for these new retailers from both mid-range fashion and the coffee & restaurants sector to enter the market. Along with improving luxury retail sales, demand for mid-range fashion remained solid but several major groups’ secondary brands were not performing well in regional cities. Retailers focused more on re-branding, replacing underperforming stores by changing brands across their portfolios.