WEST END retail rents are set to soar further in the wake of a record £700 per square foot lease secured by Spanish retailer Desigual.
The fashion chain will pay the eye-watering sum for the lucrative window-side parts of the shop floor, as part of a deal with property investor Prupim last week.
Desigual’s rent has smashed the previous record for Oxford Street retail space, set in 2009 by Sunglass Hut with a £615 per square foot lease agreement.
Disney, Prupim’s outgoing tenants at 360 Oxford Street, paid around £540 per square foot for the window display in the premises opposite Bond Street Tube station.
Several retail giants including O2, Mango and All Saints are thought to have made bids for the 6,500 square foot shop, in a sign of heightened competition for flagship retail spots in the capital.
“It’s a very big jump in rents, thanks to added demand for a presence on Oxford Street coupled with a continued lack of supply,” said Richard Scott, director of central London retail agencies at Jones Lang Lasalle. “There is a wealth of new players trying to get onto Oxford Street, all willing to pay very high rents. It sets a precedent for future leases or rent reviews, though it’s purely in line with demand.”
Large West End retailers including Gap face rent renewals in the coming months. Retailers in the area enjoyed a bumper rise in sales last month, up 9.6 per cent year on year compared to a 1.3 per cent UK average, further making the case for a hike in rents.
“Retailers don’t pay top rents in the West End to get their names out there. They pay because the footfall is the highest in the capital,” said Scott. “Rents in places like Westfields are lower, but so is turnover, and companies will fight to remain on Oxford Street.”
West End retail space commands some of the highest rents in the country. London was the fourth most expensive city for retail space in the world in the first three months of 2010, according to CBRE, in part due to the rise in the West End.