Retail investment in central London is expected to exceed £1bn this year, with up to a tenth of that set to be spent on Oxford Street, raising fresh hope for the future of the London shopping destination.
Some £810m was splurged on retail investments across London in the first half of the year, new figures from BNP Paribas Real Estate show, with the figure bolstered by million pound deals in London’s West-End.
Investment is set to continue, with etween £75m and £100m expected to be invested in Oxford Street by the end of the year.
So far this year, a number of high profile deals have taken place on Oxford Street and Regent Street, including Swatch Group’s £103m acquisition of designer YSL’s flagship store on 32-33 Old Bond Street.
Swiss watch brand Richard Mille also recently bought its flagship store on Old Bond Street for circa £170m as luxury spending proves resilient despite the cost of living crisis.
“Retail investment in traditional West End locations are in high demand,” Fergus Keane, head of central London investment markets at BNP Paribas Real Estate, said.
“To put the £810m in context, this compares to around £1.2bn transacted in the West End’s office sector over the same period. Volumes in these sectors are never normally this close.”
The news comes amid a challenging period for the iconic shopping drag, which in recent years has been battered by declining footfall and an infestation of illicit American Candy Stores.
Westminster City Council recently launched a £10m scheme to transform the high street, with provisions to allow small businesses to rent vacant stores for free and lower their business rates by 70 per cent.
“Oxford Street has now reached the bottom of the cycle,” James Ebel, vice chairman at London-based strategic retail property advisors Newmark Retail, told City A.M.
“Rents and business rates, on some parts of the street, are at their lowest point in almost two decades. Many of the stores that were empty are now leased as Oxford Street represents a fantastic opportunity for an occupier to secure prime space in London.
“Many luxury brands remain focused on New Bond Street. Demand for that location is incredibly high and it is thriving from an occupier point of view.”