Luxury brands battle for London's prime retail locations

London - As one of the world's leading shopping meccas, London has one of the most costly retail rents. Central London's prime locations have seen boutique and store rents soar 9 percent in the final quarter of 2015, the fastest growth since 1988. This comes as luxury retailers are keen to have their flagships in the British capital. Over the year, central London rents jumped by an average 18 percent.

Phil Cann, head of UK retail at CBRE which monitors rental costs, told The Guardian demand was being driven by beauty, jewellery, accessories and other high-profile brands.

“Retailers are under quite significant challenges in their domestic markets and have two options: e-commerce or overseas expansion. London, whether you’re Australian, American or Canadian, is a very attractive option. ” Cann said.

Retailers are keen to have high-profile stores in London

London stores are also benefiting as retailers seeing a shift towards online shopping opt for fewer but higher-profile retail units. Prime sites such as the Westfield malls in Stratford and White City and prime West End locations have seen rents rise while secondary locations have suffered.

The stronger economic performance in London compared with the rest of UK, partly helped by visitors from abroad, in recent years has also fuelled demand. The jump in central London rents was far in excess of a national rise in prime retail rents of just 0.8 percent compared with the previous quarter as the number of visitors to high streets slid by nearly 4 percent.

New infrastructure developments are also playing a part. Rents around Tottenham Court Road tube station soared by as much as 30 percent last year, ahead of the arrival of Crossrail in 2018, when three times more people a day are expected to travel through the busy junction.

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