According to Savills ‘World and London‘ report, its circa 18.8m international overnight visitors, who contribute to its $24bn annual tourist spend, have attracted increasing numbers of international brands to the city. Since 2012, over 98 international brands have opened in London locating across 23 different retail villages.
The report suggests that the biggest spenders are from UAE and China, with an average spend per transaction typically over £1000 – China is now the largest consumer market of luxury products globally but Chinese tourists currently account for only 2.6% of overseas spend in UK totalling £559m but with improvements to the visa process, Visit Britain has predicted numbers to rise from 233,000 to 650,000 by 2020 with spending power of almost £1.1bn. This upswing will further attract international brands from Asia Pacific and South America – recent new entrants have come from Europe (64%) and North America (25%) and include J.Crew, Other Stories, Carven, Celine, IRO, Lindex, American Eagle, Victoria Secrets, Lulumelon.
Peter Thomas, Director of Savills central London retail, says: “Constraints on traditional key pitches such as Bond Street and Oxford Street has broadened the interest on a variety of retail destinations available to occupiers and shoppers. Currently top choice locations are Westfield (West London and Stratford), Covent Garden and Regent Street but Kings Road, Marylebone High Street and Spitalfields are all seeing major interest from new entrants.”
In line with tourist spend increasing, London has also seen the rate of international investors into its retail property intensify. According to Savills data, 59.2% of total spend in London‘s retail property market was by overseas investors equating to £1.5bn. Close to half (45.2%) of all retail units on Bond Street are now owned by overseas entities, up by 10% when compared to January 2013. Oxford Street‘s overseas ownership has increased by 24.4% since early 2014 with foreign ownership accounting for 41.1% of units.
Marie Hickey, Director of Savills research team, says: “The trend for occupiers purchasing stores, in part as a way of future proofing themselves against future rental uplifts, appears to be relatively unique to London. This is particularly prevalent on Bond Street where we have seen prime Zone A rise by 20.8% per annum over the last three years.”
