Retail market : una Ricerca di Location Group

Location Group Research: New peak rent of 13,850 Swiss Francs in Zurich’s Bahnhofstrasse

In Location Group’s latest retail market survey, over 978 pages in a total of 145 of the most notable international cities and resorts of the jetset fashion world were analysed, not only in Switzerland, Germany and Austria. 500 shopping centres, 750 shopping streets, 1,000 retailers and 2,000 new shops were put under the scope.
Invasion of Jewellers on Zurich’s Bahnhofstrasse
In Europe, the watch brands were responsible for the growth of the already high rents of 10-15,000 Euros per square metre just as in Geneva, London, Paris, and Zurich. This record is led by Breitling on the New Bond Street in London, after they took over the store of Diesel there. Also in Paris at Place Vendôme, in Geneva on Rue du Rhône, and in Zurich on Bahnhofstrasse became apparent immensely high rent prices, because there is not enough space for all jewellers and watch brands, though there is taking place a combat of squeezing each other out.
Zurich is currently being overrun by  jewellers. Bucherer recently paid a key money of 7 million Swiss Francs to buy out French women’s fashion house Devernois’s rental contract of the location which is situated right next to Christian Dior in order to open a Rolex boutique. Jaeger-LeCoultre and another international watch maker will shortly becausing a stir on the Bahnhofstrasse, as 6 new temples of luxury increase the total number to 28. IWC has opened a store at number 61. Their previous premises have been taken over by jeweller Pomellato.
Diesel lost their tussle over their old location to Omega, and has now opened a new boutique opposite the Globus department store, costing over 2 million francs a year in rent. Nextdoor, Mango is paying to the owners UBS the tidy sum of approximately 2-3 million Swiss Francs a year. Ten years ago these figures were only a third of today’s rates. The old Omega store may well be taken over by Longines or Rado.
Zara overtakes H&M store with worldwide record rent in Hong Kong
One of the most meaningful changes worldwide was in the offing last year in Hong Kong, where H&M was overtaken by Zara on Queens Road. Connected to this is a duplication of the rent to round 40,000 US Dollars per square metre per year. This is the double amount of the usual rent on Fifth Avenue in New York
Apple achieves the highest sales per square metre in New York and Zurich
The world’s highest turnovers per square metre have been achieved by Apple, with 225,000 francs per square metre a year in Zurich’s Bahnhofstrasse (100 million francs in total) and 3-4 times more on Fifth Avenue in New York (around 450 million dollars). With 8 times Apple’s floor space, H&M makes almost as much in sales on the Bahnhofstrasse.
The most expensive location with respect to the rents and the yield
Definitvly the most expensive locations are in Hong Kong on the Causeway Bay and the Queens Road, followed by New York on the Fifth Avenue as well as the New Bond Street in London, the Bahnhofstrasse in Zurich, the Champs-Elysées in Paris as well as Tokio, Sydney, Genf, Rom and Mailand. Regarding to the yields, currently a capital flight takes place in switzerland and regard to the current rental income it is invested by one percent of the yield.
For instance, last year the Axa Winterthur acquired the property from Credit Suisse at the Bahnhofstrasse 53 in Zurich with an yield of under 2 %. The purchase price was 390 million francs. A Norwegian pension Fund has even paid 1 billion francs for the headquarter of Credit Suisse. The return is not yet known, but it can be assumed that this also moves in the low single-digit range.
The most expensive locations are not the same as the best yields
No, the most expensive locations are no equivalent with the best yields. It always depends on the sice of the respective property. Roughly you can say the best yields on the very best locations with the Mainstream Fashion Brands moves around five percent. The higher the quality of the road respectively the location, the lower is the yield usually.
This is due to the objects are often sold, because often institutional owners are behind it. But in the long term it is invested in properties with top-profile tenants and thereby the security of a permanent return is guaranteed. An recent example of this are the Maximilianhöfe on the same street in Munich, which houses luxury labels like Etro, Versage, Chopard, Bottega Veneta, Ermenegildo Zegna, Bally and Moncler. This property has been sold within the last 10 years three times to one of the richest americans, Edward Johnson IV, always to higher prices and last for 300 million Euro.
Source: Location Group, Zurich