Shortly before the end of the sales, several studies have been published on the retail market in France. Carte Financement draws selectively from it by focusing on the city center. Like bees around the honey pot, the object of all desire is to be located in the center of the city , a phenomenon observed in recent years and is expected to increase itself.
France Knight Frank believes that the conditions were rather favorable to merchants in France. Last year, in fact, growth was better than expected. If consumer spending turning since 2007 from 40 to 42 billion € per month expenses, they return to the top of the corridor, which had been achieved only once, in 2011.
Run on the most popular areas
Cushman & Wakefield estimates that € 2bn real estate investments in shopping streets last year, an increase of 27%. This jump is due to several shops transactions at the foot of building more than € 100M.
Cushman & Wakefield points out a increased competition to hold the upper hand in the City of Light. As demonstrated :
- The boom of recent signs (Pandora, Tiger, Hema),
- The landing of new entrants (Nyx),
- The proliferation of ephemeral shops,
- The rise of brand stores in various sectors (Maille, Lipault, Le Creuset),
- The opening of pure shopping players (Spartoo, Sensee, Smallable)
- and qualitative concepts of restaurant and food (Vapiano, Kusmi Tea).
Drastic offs
According AM French, the rise of e-business reduces turnover at m2 shops, prompting retailers too:
- reduce areas leased in areas located a little apart.
- reinvest in high traffic areas, despite high prices, while deploying a multi-channel offer.
In Europe, the pressure on the center is further enhanced by the champions of e-commerce, which do not themselves either reluctant to open shops flagship in places most passersby.
The rarity of the best locations nevertheless encouraged some traders to renovate their premises to see opt for alternative neighborhoods, offering more choices.
The liberalization on sunday’s openning
Sunday’s opening threw oil on fire. Despite that, many speakers hastened to search for gems in the capital. Knight Frank France has measured that transactional activity has focused on the best streets.
In turn, Knight Frank France emphasizes two impacts :
- The increase in rents affects most available surfaces on premium locations. Previously, she was confined to the finest shops.
- There has been a small number of lease on the second category arteries.
In the end, despite these differences, the Parisian average rent rose 10% in 2015, now € 1,390 per m² of weighted area.
With wide disparities.
Prime rental values in Paris in 2015 (in € / m² /year excluding VAT and expenses)
Source : Knight Frank France
French provinces does not escape this wave.
According to Cushman & Wakefield, some lighthouses axes capture investment, as relatively recent foreign retailers (Michael Kors in Lyon), brands are looking to differentiate themselves with shops run out clean (Maille in Bordeaux) and new entrants (Nyx to Toulouse).
Prime rents (€ / m2 / EN / ZA)
Source : Cushman & Wakefield
However, Cushman & Wakefield have received a polarization in province :
- The general increase of vacancy goes on in smaller towns,
- But some cities are sought (tourist flow or affluent local consumers) as Annecy, Biarritz and La Rochelle.
Pressure on yields
This price surge weighs on returns.
In the city center of Paris, it is not uncommon to see rental yield below 4%, levels that could be achieved for exceptional locations in province.
Knight Frank France estimated that consumption will keepup in 2016, although there is uncertainty in the job plan. Again, only the best sites will come out of the game. Therefore, the gap between prime locations and others will likely increase itself.
According to French AM, only the largest cities will attract more and more retailers. The asset manager has ranked cities in terms of attractiveness. Come into account some urban projects and large cultural or sporting events. The location is important for the investor wishing to draw long-term income with limited risk. For the French AM, selectivity is required.
