A new report on Paris luxury commercial real estate offers fascinating insights for readers of the 56Paris blog.
With a surge of recent activity on its major luxury streets, Paris continues its reign as the undoubted global capital for high-end retail.
We look further into the report, and what this business growth could mean for the wider real estate market.
The European Luxury Retail Report 2024
A shift is taking place within the European luxury industry. And at the forefront is Paris, long famous for its prestigious boutiques and designer flagship stores.
Published by Cushman & Wakefield, the American global commercial real estate firm, it’s called the European Luxury Retail Report 2024. And its findings are full of surprises!
The main takeaway for Paris is this – the French capital is seeing more new luxury stores opening than ever before.
Even with commercial real estate struggling elsewhere in France – and around Europe – it’s bucking the trend.
This is certainly positive news for our city.
Back to brick – a resurgence of luxury retail stores in Paris
The report reveals a fascinating shift taking place in the Parisian luxury industry.
Following a period of increased focus on e-commerce, there’s a renewed interest in physical boutiques.
In 2023 alone, a staggering 25 new stores opened their doors on Paris’ four main luxury streets – rue St-Honoré, avenue Montaigne, avenue des Champs-Élysées and rue du Faubourg St-Honoré.
These prestigious addresses have seen a mix of giants like Saint Laurent, Dior and Valentino setting up shop, alongside exciting new entrants such as Palm Angels, Mackage and Zimmermann.
This now means 96% of commercial properties are occupied on the four main arteries of Paris.
It’s not just new store openings. Luxury brands are expanding their existing retail spaces too.
Bottega Veneta’s large new space on avenue Montaigne boasts 800 m² over two floors. While Alexander McQueen unveiled its largest global store to date on rue St-Honoré – it spans a remarkable 1,555m².
But why is this happening? Why the return to brick-and-mortar stores?
How Paris luxury commercial real estate is changing
The luxury brands are trying new shopping experiences for their customers, making them more multifaceted and exciting places to visit.
It’s a move away from simply selling products off the shelf – and offers an added dimension that can’t be found when buying online.
Set on avenue des Champs-Élysées, Casa Panerai is the largest Panerai store in France. But it’s also a brand museum, showcasing the company history.
Other brands are collaborating with artists to make their stores attract tourists and visitors. Louis Vuitton did this last year, working with Yayoi Kusama to create huge statues on the facades, including the flagship store opposite the Pont Neuf.
Other notable facade installations include Dior on Rue St-Honoré and Rabanne on Avenue Montaigne.
Meanwhile, Louis Vuitton is constructing its first-ever branded hotel on the Champs-Élysées. The hotel will feature a luxury store for guests and shoppers, further solidifying the brand’s presence on this iconic avenue.
Luxury real estate – are rents rising?
The surging demand for prime retail locations is resulting in exceptionally low vacancy rates across Paris’ four main luxury streets.
Avenue Montaigne boasts a remarkable 0% vacancy rate. While the remaining three avenues all hold vacancy rates below 4%. This scarcity, coupled with the influx of luxury brands, is driving business rents upwards.
This boom in Paris luxury commercial real estate could also have a ripple effect on the residential sector.
While the two property markets behave differently – the influx of high-spending individuals creates a demand for high-end residences in close proximity to these prestigious shopping areas.
This, in turn, can lead to rising rents and property values in these desirable neighborhoods. Great news for owners and investors here!
Here to help you find your perfect home in Paris
As Paris continues to attract leading luxury brands, and fosters innovation within the retail landscape, its position as the undisputed capital of luxury remains secure.
If you’re thinking about living the Parisian lifestyle, we’re here to help.
Our team of local real estate experts have many years of experience, and we can help find your dream Parisian apartment too. Don’t hesitate to contact us today.
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