Paris retail

News

01 August 2001

A limited supply of large units combined with local government constraints on obtaining consent for stores over 300m2 has led to retailer demand being curbed, according to Knight Frank.

“The market can be divided into two sections when talking about demand: the mass market and the luxury market,” says Nicholas Olivaux, head of high street retail with Jones Lang LaSalle in Paris.

“Mass-market retailers have become much more cautious, focusing mainly on key areas such as the Champs Elysées and, as a result, mass market investment has decreased,” says Olivaux. On the other hand, the luxury retail market is very active and “a key factor in the Paris retail market”.

There has been an increase in luxury retail activity, leading to a strong level of competition for units. In order to increase turnover, high-quality retailers are starting to favour mainstream retail areas over exclusive prime streets, such as Rue du Faubourg Saint Honoré. Knight Frank recently let two 700m2 stores at 22 Avenue Montaigne to Louis Vuitton Möet Hennessy. They will be occupied by Givenchy and Tajan Phillips.

Retail development in the centre of Paris is limited and one of the few large developments planned is a mixed office and retail scheme at rue Saint Honoré and Place Vendôme, in Paris’ 1st arrondissement.

The development, for which the joint investors are UK property company Hammerson and French insurance company AXA, will include 5,600m2 of retail space comprising four units. Construction is due to begin at the end of 2001 with completion scheduled for the end of 2003. The development represents a total investment of FFr1.5bn.

Hammerson also plans to work with MAAF to redevelop 3,500m2 of retail space in a prime area of Paris, which opens out onto Place de l’Opera, boulevard des Capucines and rue de Quatre Septembre. Construction is scheduled to begin in mid-2004 and will take two years.

Lack of supply has caused prime retail rents to soar and, for the first time, rents on the Champs Elysées reached FFr50,000 per m2 a year in 2000. The best sites in the luxury sector are commanding rents of FFr30,000 to FFr35,000 per m2 a year, whereas rents for mass market sites are between FFr25,000 and FFr35,000 per m2 a year.

A limited supply of large units combined with local government constraints on obtaining consent for stores over 300m2 has led to retailer demand being curbed, according to Knight Frank. “The market can be divided into two sections when talking about demand: the mass market and the luxury market,” says Nicholas Olivaux, head of high street retail with Jones Lang LaSalle in Paris. “Mass-market retailers have become much more cautious, focusing mainly on key areas such as the Champs Elysées and, as a result, mass market investment has decreased,” says Olivaux. On the other hand, the luxury retail market is very active and “a key factor in the Paris retail market”. There has been an increase in luxury retail activity, leading to a strong level of competition for units. In order to increase turnover, high-quality retailers are starting to favour mainstream retail areas over exclusive prime streets, such as Rue du Faubourg Saint Honoré. Knight Frank recently let two 700m2 stores at 22 Avenue Montaigne to Louis Vuitton Möet Hennessy. They will be occupied by Givenchy and Tajan Phillips. Retail development in the centre of Paris is limited and one of the few large developments planned is a mixed office and retail scheme at rue Saint Honoré and Place Vendôme, in Paris’ 1st arrondissement. The development, for which the joint investors are UK property company Hammerson and French insurance company AXA, will include 5,600m2 of retail space comprising four units. Construction is due to begin at the end of 2001 with completion scheduled for the end of 2003. The development represents a total investment of FFr1.5bn. Hammerson also plans to work with MAAF to redevelop 3,500m2 of retail space in a prime area of Paris, which opens out onto Place de l’Opera, boulevard des Capucines and rue de Quatre Septembre. Construction is scheduled to begin in mid-2004 and will take two years. Lack of supply has caused prime retail rents to soar and, for the first time, rents on the Champs Elysées reached FFr50,000 per m2 a year in 2000. The best sites in the luxury sector are commanding rents of FFr30,000 to FFr35,000 per m2 a year, whereas rents for mass market sites are between FFr25,000 and FFr35,000 per m2 a year.