While the retail property market is struggling across most of Europe, Paris commercial real estate bucks the trend, according to the latest reports.
There are several reasons why this is good news for 56Paris clients.
We take a look at what’s happening.
More luxury stores than ever before
The commercial real estate market in France and Europe is currently facing challenges in the post-Covid world. There are rising interest rates, weak growth in the sector, and new carbon neutrality regulations to deal with.
However, a new report highlights one city that is bucking the trend – Paris.
This is partly due to luxury real estate big players such as LVMH and Kering investing in commercial real estate. But there are other reasons that make our city unique.
It follows a record-breaking 2022, which saw more new luxury stores opening in Paris than ever before. Something we reported on in an earlier blog.
Why Paris commercial real estate bucks the trend
Paris has long been synonymous with luxury and elegance.
Our city boasts the highest concentration of high-end boutiques in Europe, a staggering 165 luxury shops. This places Paris third in the world, behind only Tokyo and Seoul.
And while the pandemic’s grip on global travel may have loosened, the allure of Paris remains as potent as ever.
The return of American and Asian tourists is injecting a significant financial boost into the city’s commercial ecosystem. Hotels, restaurants and luxury retail outlets all feel the positive ripple effect, contributing to a dynamic and resilient retail landscape.
Plus, the upcoming 2024 Olympic Games act as a catalyst for further economic growth. This international spotlight on Paris fuels investment, infrastructure development, and a renewed sense of optimism.
This translates directly into a thriving real estate market, poised to capitalize on the influx of visitors and the buzz surrounding the Games.
Big players making moves in luxury retail
As Paris commercial real estate bucks the trend, big players are continuing to make moves in the luxury retail sector.
Luxury titan Moët Hennessy Louis Vuitton (LVMH) has acquired the iconic Louis Vuitton building on the Champs-Élysées in Paris for a cool €770 million. Or as much as €900 million, depending on the source.
The Art Deco building, adorned with a massive LV logo, houses the brand’s flagship store and covers a prime 9,400 square meters.
This strategic move further solidifies LVMH’s presence on the famed avenue, adding to their recent purchase of a prime building on the rue de la Paix and another in the Golden Triangle on rue François 1er.
In a strategic move mirroring its rival, another luxury giant Kering has secured four buildings on the rue Saint-Honoré for the construction of a flagship Gucci store – with an estimated value of €300 million.
Kering has also acquired the former Canadian embassy on avenue Montaigne, slated for redevelopment as a prominent Saint Laurent boutique. This is directly opposite the historic headquarters of LVMH’s Dior brand. Construction of the new store is already well underway.
In short, both LVMH and Kering are doubling down on luxury real estate, securing prime Parisian locations for their powerhouse brands.
This strategic move positions them for continued growth and dominance in the world of luxury. And Paris is at the heart of it all.
Paris now number one for HNWIs
Of course, the appeal of Paris transcends luxury shopping sprees.
According to a recent report, last year Paris claimed the coveted spot as the top destination for residential real estate investment by high-net-worth individuals (HNWIs).
This is a jump from fifth place the previous year, and puts the city ahead of Dubai, Miami and New York.
This surge in HNWI interest isn't simply about large apartments overlooking the Seine. It’s a recognition of Paris’ multifaceted charm – its cultural richness, culinary excellence and undeniable quality of life.
Beyond the glitz of luxury retail
Paris’s resilience isn’t just a product of its glamor and tourist appeal either.
Its resilience in the commercial real estate sector is also due to its robust infrastructure, diverse economy and innovative spirit.
The city boasts world-class universities, research institutions and a vibrant tech scene, attracting talent and businesses that contribute to its economic dynamism.
Also, the ambitious ‘Climate Plan 2050’ aims to make Paris carbon neutral by the mid-century.
This is why the government is actively tackling the carbon neutrality challenge, with initiatives like green building regulations and pedestrianized zones, making it an attractive proposition for environmentally conscious businesses.
This commitment to environmental responsibility is attracting a new wave of companies, not only in the luxury retail sector, but also in the tech and green technology industries.
These innovative players are clearly attracted by a city that aligns with their values, and offers a supportive ecosystem for their growth.
Investing in Paris property
If you’re looking to invest in Paris real estate, get in touch with 56Paris. We are a team of local property experts, and can help you find your dream apartment.
Why not make 2024 the year you start living the Parisian life yourself?