Jones Lang LaSalle has analysed the presence of 150 leading international retailers within 55 European markets and created an index of the top 10 most attractive cross-border retail destinations in Europe.
The index reveals that London attracts the greatest number of international retailers, whilst the USA ranks number one as the biggest exporter of retail formats. Moscow ranked 3rd in Top 10 most attractive cross-border retail destinations in Europe.
Against the backdrop of a volatile economic climate, retailers' expansion strategies have sight on the longer term and targeted expansion is still underway.
James Dolphin, Head of pan-EMEA Retail Agency at Jones Lang LaSalle, said: «The European economy – and the retail industry specifically – is facing huge headwinds. Retailer appetite for the best space across Europe, however, remains strong. Many top-tier retailers will accept flagship space in iconic locations and nothing less. This is maintaining or, in some instances, putting upward pressure on rents in super-prime locations, while more secondary locations are seeing higher vacancies and reduced demand for space.»
According to Jones Lang LaSalle’s Cross Border Retailer Attractiveness Index, the top ten most attractive cross-border retail destinations in Europe are:
1. London
2. Paris
3. Moscow
4. Madrid
5. Milan
6. Prague
7, 8, 9. Munich, Istanbul, Barcelona
10. Rome
Maxim Karbasnikoff, European Director, Head of Retail Department, Jones Lang LaSalle, Russia & CIS, commented: «Sustainable growth of the 15M Moscovites» disposable incomes, has steadily boosted retailers sales for the past 3 years. Moscow, still under development, now accounts for the 3rd largest retail market in Europe and is the gate to a 140M consumers market. Gloomy economic perspective in Europe drives global retailers to seek new growth territories, and Moscow will keep being high on their priority list.”
2011 Newcomers in Russia are: Berghaus, Diesel, DKNY Jeans, DKNY, Jaeger, Yves Salomon, American Eagle Outfitters, Victoria«s Secret, La Senza, Jimmy Choo, Joseph, Dorothy Perkins, Firetrap, OVS Industry, Wendy»s, Tally Weijl, Nordsee, Pinkberry, Banana Republic. At least 10 retailers plan to enter Moscow market in 2012 alone, including Debenhams, Noodle House, Seattle's Best Coffee, Muzz Buzz, Brisket Express, Krispy Kreme, Peek & Cloppenburg, Abercrombie & Fitch.
James Brown, Head of EMEA Retail Research at Jones Lang LaSalle, continued: «This polarisation of the retail market, which is occurring both at a national level and within city markets, is being exacerbated by the constrained shopping centre development pipeline, particularly in more mature Western markets. The supply of truly modern space that is suitable for top tier retailers remains tight in most markets. New city schemes that have opened, such as Westfield Stratford in London and Marmara Forum in Istanbul, have proved to be hugely attractive, both to new and existing brands, and consequently to the end consumer. These schemes have also been responsible for ‘importing’ new international brands into their respective markets.»
Despite recent dynamic growth, the stock per 1,000 inhabitants in Moscow remains modest for the size of the city (See diagram).
James Dolphin continued: «The constrained pipeline is also contributing to cross-border retailer expansion, as Western retailers look outside their home markets for more space and greater sales potential. European retailers such as Desigual, Inditex, Fast Retailing, Bestseller, H&M, G-Star and Superdry have all been in expansive mode over the last 12 months, whilst the USA is now the dominant exporter of retailers, accounting for almost 20% of all international retailer presence. Long established brands such as Starbucks, Timberland and Gap account for a significant proportion of this presence; it is, however, the likes of Forever 21, Hollister, Apple, Disney and Abercrombie & Fitch which have led the Americans almost by ‘stealth’ to pole position. The UK is the second most popular origin of international retailers, followed by Germany, Spain and France.»
The top ten largest exporters of retail formats across Europe are;
1. USA
2. United Kingdom
3. Germany
4. Spain
5. France
6. Italy
7. Sweden
8. Denmark
9. Netherlands
10. Canada
James Brown concluded: «Interestingly, we have identified certain European cities which have both strong market fundamentals and currently, a relatively low international retailer presence. In particular, the Scandinavian markets of Oslo, Helsinki, Gothenburg and Malmo, in addition to some UK, French and German regional cities. These will no doubt begin to feature on the radar for retailers seeking further international expansion.»
