London remains the retail market leader in the EMEA region, boosted by strong consumer spending and more new shop openings than any other market, according to a report by real estate advisor Colliers.
A 48 per cent year-on-year rental growth in central London helped to make the city Europe's top-performing market.
The overall picture for the region was positive, as 2016 marked the third consecutive year of consumer and retail spending growth in Europe. Retail spending for countries in the EU is expected to increase by 2.2 per cent in 2017.
The forecast for the UK was mixed, as Colliers co-head of EMEA retail Paul Souber predicted that, “significant increases in occupational costs in 2017, as a result of the rating revaluation and an anticipated rise in inflation, are likely to curb any further rental growth over the coming year.”
However UK brands are likely to do well selling their products abroad, especially through ecommerce, while tourists will continue to spend in high-end central London stores.
Elsewhere, Luxembourg recorded the highest retail spending growth, with a 14 per cent rise. Eastern Europe was close behind, with Romania's market growing 13.3 per cent, Lithuania's by 6.7 per cent, and Poland's by 6.4 per cent. The UK was next on the list, with 5.5 per cent growth.
Paris suffered from a decline in international visitors, but demand picked up in the fourth quarter of 2016, pointing to a better outlook for 2017. The city also saw several new luxury shops open, including the first French store of British fashion designer Vivienne Westwood.