The Italian fashion giant Dolce & Gabbana (D&G) has signed one of the highest ever rents for a store in London’s West End, despite the credit crunch.
D&G has agreed to pay a record £820 per square foot a year for zone A, the first 30 feet of the store, as well as a £1.4m premium to secure the lease on a new jewellery and accessories store on the capital's upmarket New Bond Street.
Lalique, a French luxury goods retailer, is vacating the 3,267 square foot store on the street, which is Mecca for luxury shops, in January.
Steve Stedman, a senior director for retail at the property specialist CBRE, which advised the landlord on the transaction, said: “In terms of Zone A, it is the highest rate per square foot.” He added: “If another shop came up in that core heartland of New Bond Street, there would still be 3 to 4 retailers prepared to pay the rent to secure that position.”
The average “zone A” rent in London Westfield, which opened last week, is £300 per sq ft.
However, the transaction is likely to kick-off a rental negotiating war on New Bond Street between existing retailers and landlords - who will use the D&G deal as a bargaining tool to demonstrate demand - when the tenants’ rent comes up for review.
Anthony Lorenz, a senior partner at The Lorenz Consultancy, which advised Lalique, said: “All the tenants in the area facing rent reviews will have to argue against that comparable because this is obviously the most recent evidence.”Reuse content