New international retailers take 78% of stores in London, Paris and Berlin

According to research from international real estate advisor Savills 78% of new store openings in London, Paris and Berlin during the last two years have been taken by international retailers. Of the new stores acquired, the firm finds that retailers from North America have been the most expansive accounting for 20% of new openings across all three cities. This is followed by 14% from Italy and 11% from Switzerland.

Savills reports that London remains the most popular for new international retail entrants, with 90% taking space in the city compared to 65% in Paris. However, Paris has been increasing in popularity and has seen twice as many new international retailers opening their first stores in the city in 2013 compared to 2012. Additionally, the firm has found that both Paris and London have welcomed retailers from a greater variety of countries, 14 in total, compared to 11 in Berlin.

Marie Hickey, associate director of research at Savills, comments: "London remains the first choice city for many retailers looking to expand outside of their domestic markets, especially those from North America who are attracted by the common language and see London as a gateway to the wider European market. Over the last two years Paris has held greater appeal to expanding brands from within Europe such as those from Italy and Germany, but we expect some more of the North American brands now found in London will make the move across the channel."

In terms of rents, Savills finds that prime zone A rents for London's key shopping streets (Bond, Oxford and Regent) now average Ђ11,367 per sq m (Ђ1,056 per sq ft) having increased 6.1% during Q3 13. Bond Street leads the way with prime rents at Ђ16,420 per sq m (Ђ1,525 per sq ft) having increased 8.3% in Q3. This is in line with the Ђ16,000 (Ђ1,486 per sq ft) prime zone A achieved in Champs Elysees where rents increased 6.7% over the same quarter. In Paris, the increasing number of new entrants will continue to put upward pressure on prime rents in key shopping districts.

Anthony Selwyn, head of central London retail at Savills, comments: "The high retail rents in London and Paris have not deterred new entrants. In London we have seen new entrants increasingly look to emerging retail pitches such as Bruton, Dover and Conduit Street, typically in the vicinity of the key streets due to greater availability of units and lower rents. These locations provide a more cost effective way to test the UK market."

In terms of national gateway cities, Savills states that once again London leads. For 92% of new entrants to the UK, London was the location of their first store versus 75% in Paris. Berlin is the weakest gateway city, only 48% of new international entrants took their first German store there.

Marie adds: "Despite being the capital city, new entrants to the country historically have been attracted to the more affluent cities such as Dusseldorf, Hamburg and Munich. However, availability and rental pressures in these traditional gateway cities have led an increasing number of new entrants to look at Berlin. The city's sizable tourist market and reputation as a cool young destination has also helped to attract an increasing number of new retailers."

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