Italian shoemaker pays record rent at London store
LONDON, England - Italian luxury shoemaker Salvatore Ferragamo is close to agreeing a deal to pay a record UK rent at its Bond Street store that will break the 1,000 pounds ($1,576) per square foot mark for the first time, a source familiar with the deal told Reuters.
The deal would break the previous record of 965 pounds per square foot for the valuable Zone A front section of a store set by jeweler Piaget on the same glitzy central London shopping strip in December 2009.
Under the deal between landlord NFU Mutual pension fund and Ferragamo, the retailer will extend its lease and increase its rent from 600 pounds to 1059 pounds per square foot at 24 Old Bond Street as part of a plan to expand its retail space, the source said.
Bond Street rents far exceed other central London shopping streets. Rents on the second most expensive strip of Oxford Street are on average 200 pounds per square foot lower and Marylebone High Street peaks at about 225 pounds.
NFU declined to comment. Ferragamo was not immediately available to comment.
Fierce competition for space on Bond Street, the UK's most expensive shopping stretch and the second priciest in Europe behind Paris' Avenue des Champs Elysées, has driven up rents and spurred deep-pocketed retailers to buy stores in order to guarantee ownership of top sites.
Unlike mid-market retailers, luxury brands have bounced back strongly from the depths of the 2008 downturn, helped by strong demand from emerging markets such as China and Russia.
The acute space shortage on the half mile stretch combined with strong demand from global brands that see a Bond Street presence as essential to European expansion plans, may boost rents to 1,500 pounds by 2013, consultancy Cushman & Wakefield said.