home  › Real estate

Luxury retail rents are rising, with Milan touching the €8,000 per square meter mark

by Vincenzo Chierchia

Retail spending and store rents in top Italian luxury shopping streets are increasing at the same rate.

According to Fashion High-Street 2015, a study carried out by World Capital in collaboration with the retail association Federazione Moda Italiana (Purchase Observatory CartaSi and Global Blu) there has been: “A slight increase in sales in the fashion sector during the first half of 2015, and a further growth in consumption in the last six months for stable shops in Italian luxury retail streets.”

Spending has shown mild signs of recovery (a 0.17% rise in the first half of 2015 from the same time in 2014) and “retail properties have seen rents brush the €8,000 per square meter mark in the second part of 2015,” said Neda Aghabegloo, head of research at World Capital.

“These two factors, fashion and real estate, are tightly bound together. Firstly because of a resurgence of consumer confidence and a consequent rise in spending, and secondly due to the rising demand that distinguished international labels have put on the limited spaces along luxury streets,” continued Neda Aghabegloo. “Milan, Rome and Venice once again prove to be prime locations and the focus of retail activity, due to significant rises in price as well as a notable influx of tourists.”

Rents on the Via Montenapoleone in Milan touch €8,000 per square meter, meaning that it's still the most prestigious shopping street out there. Meanwhile its Roman rival Via Condotti boasts yearly rents of €7,000 per square meter.

In Venice a general rise in rent has been noted, in particular within Piazza San Marco which has properties for up to €4,700 per square meter.

The situation is also looking good for Genoa and Bologna, both of which draw our attention to a global rise in spending; namely, the Genoa street of Via XX Settembre has a registered rents at €1,000 per square meter. The highest rent in Galleria Cavour in Bologna is more than €2,000 per square meter.

Conversely, Florence -- together with Turin and Verona, remain in a stable position. In the south, concludes Aghabegloo, Catania and Naples remain stable with a tenuous growth.

What's interesting is the Naples shopping street of Via Scarlatti al Vomero that, having been transformed into a pedestrian area, has now become a highly functioning commercial location (€1,500).

For Renato Borghi, the president of retailers group Federazione Moda Italia, fashion retailers need support in order to achieve a steady exit from the long recession.