by Brianna Crandall — September 9, 2013—Going against the tide of the turbulent global economy, global tourism and luxury goods sectors are reportedly thriving against a backdrop of the economic crisis. In its latest Pulse report, titled Luxury Retail Property Market in Paris, Jones Lang LaSalle highlights Paris as the epicenter for European luxury retail investment.
“In our Destination Europe 2013 report, Jones Lang LaSalle revealed that Paris can command the highest rents for international retailers, followed by Zurich and London. Paris continues to attract the biggest international and national brands that inevitably look to the city to open flagship stores, in particular the premium and luxury brands,” says James Dolphin, head of EMEA retail. JLL’s Destination Europe 2013 report examines the 250 most renowned retailer brands and their presence across key European cities.
The Luxury Retail Property Market in Paris report reveals a high demand from luxury retailers in Paris. Demand for space in the Parisian Golden Triangle (bounded by the Avenues des Champs-élysées, George V, and Montaigne) is always high, and supply almost non-existent, explains Jones Lang LaSalle. Rental values typically paid by the luxury sector have reportedly almost doubled in 18 months on the famous Avenue des Champs-Elysées, reaching 18,000 (zone A). “Prime” rental values are working their way up to 9,000 on Avenue Montaigne and to 7,500 on Rue Saint-Honoré.
The luxury sector is developing at a pace, sustained in particular by the emergence of the BRICS countries (Brazil, Russia, India, China and South Africa) contributing to the growth of this industry. Interest in the finest arrondisements from investors, particularly foreign investors, continues unabated, with a record number of acquisitions on the Champs-Elysées during the past two years.
With the Golden Triangle at capacity, opportunities to capitalize on luxury demand are emerging in new districts and in areas that are expanding or strengthening their high-end positioning, such as the Haussmann/Opéra district on the Right Bank and the district of Saint-Germain-des-Prés on the Left Bank.
Sophie Benanous , research manager at Jones Lang LaSalle concludes, “The luxury sector adapts well and will find business wherever it is. Luxury brands are now going further still and are looking to leave the streets of Paris to invest in shopping centers in the next few years. This diversification is directly inspired by the malls of the emerging countries, the successful feedback from which has encouraged the luxury brands to invest in this new shopping environment.”
