Huge demand for central London shops has pushed the premium paid by to secure space to record levels.
Watches of Switzerland has sold the lease on its 1200-square-foot store at 16 New Bond Street to Patek Philippe for £10 million — a record price per square foot.
Patek Philippe was keen to secure 16 New Bond Street as it will knock through from its existing store next door to expand.
An unnamed lingerie brand has also paid Gina Footwear more than £5 million for a small 600-square-foot shop at 9 Old Bond Street nearby.
“Key money” — the premium a brand will hand over to the existing retailer to buy their lease in addition to the rent agreed — has soared in recent years with brands willing to pay millions to secure the right shop.
Peter Mace, head of central London retail at property agent Cushman & Wakefield, said: "There is no supply and massive demand for shops in central London."
Mace said that if the amount paid in key money and rent was counted together London streets would be the most expensive in the world by far.
He said: "Across most major prime London thoroughfares the provable level of rent is below what could be achieved if the amount of key money paid was part of the figure. Central London would have some of the highest rents in the world if this was considered."
In the past few years large key money deals have included £13.8 million paid by US fashion chain Forever 21 for HMV’s lease on Oxford Street and Supergroup’s £12m purchase of Austin Reed’s lease on Regent Street.Reuse content