London comes out as the most attractive city across 57 key retail markets.
The index, launched today in a new client report entitled Destination Europe 2013 analyses the expansion and presence of 250 international retailers. London comes out as most attractive city across 57 key retail markets. Paris, Moscow, Milan and Madrid, all mature retail markets, comprise the remainder of the top five most attractive cities.
James Dolphin, Head of EMEA Retail Agency, Jones Lang LaSalle said: “London is a springboard for many retailers who want to expand internationally. We have seen several US and now Chinese retailers start their European journey over the past few months in this way. More will follow, driven in part by Westfield’s successfully launched new shopping centers, continued demand for space in Bond Street, Oxford Street, Regent Street and Covent Garden, but also sustained market opportunity, tourism levels post the Olympics, political stability and a transparent real estate market.”
Competition intensifies as retailers look East
However, with subdued economic growth in Western and Southern Europe, retailers are also starting to simultaneously look further east.
James Brown, Head of EMEA Retail Consulting and Research, Jones Lang LaSalle explained: “Emerging growth markets provide attractive expansion opportunities. Rental levels are generally lower than in more mature markets and retail sales growth prospects are clearly stronger. St Petersburg (eighth), Prague (ninth), Istanbul (11th), Warsaw (19th) and Kiev (23rd) all therefore perform strongly in our index within this context. Central and Eastern Europe has more markets in the top 30 retail locations than Southern Europe. For mature retailers established in core European markets, Eastern Europe provides both growth opportunities and diversification.”
Russia (Moscow – third; St Petersburg – eighth), Spain (Madrid – fifth; Barcelona – 10th) and Italy (Milan – fourth; Rome – sixth) are the only European countries with two cities in the index top ten, scoring substantially above ‘average’.
Germany has five cities in the top 20 (Munich – seventh; Berlin – 12th; Hamburg – 13th; Frankfurt – 16th=; Dusseldorf – 19th=).
Zara is the only retailer with 100% coverage across all the key European markets reviewed, and therefore tops the retailer coverage league. H&M is next with 96%. The Body Shop, Benetton, Mango Lush, Tommy Hilfiger, Timberland and Foot Locker comprise the rest with 80% market coverage. The Top 20 is dominated by mainstream retailers, accounting for 12 out of the Top 20 retailers by total coverage.
There are six premium retailers within the Top 20, with US retailers Tommy Hilfiger and Timberland ranking highest (seventh), both with over 80% coverage of Europe’s key markets.
Italy tops retailer nationality
Italy is the number one exporter of retail fascias, accounting for 17% of total international retailer presence. The US is in second place, with 16% of total international presence, with the UK third, accounting for 13%. The US is expected to leapfrog Italy in 2013.
Source: Jones Lang LaSalle