West End property still in demand as Reubens buy Armani store
Prime real estate will always be in demand, but at what price? Fears that the pandemic might have a lasting effect on physical retail and the prices businesses are willing to pay for property look to be overstated, for now.
The Armani flagship store on London’s Bond Street is being sold to property billionaires David and Simon Reuben for a reputed £95.5 million, understood to yield a 3% gain.
Meanwhile, the Burberry store within the Westbury hotel, also on Bond Street, is up for sale with an asking price of more than £290 million.
However, values of Bond Street property, one of Europe’s leading luxury shopping destinations, could yet be hit not just by the effects the pandemic but by retail's ability to bounce back, post-lockdowns.
Much will depend on the return of tourists to London's West End. The UK could soon be open for business to foreign tourists, but changes to the VAT-reclaim retail perk could mean they see London as a less attractive city to visit for shopping in future.
And although the long-anticipated return of non-essential retail will be a boon to physical retail overall with pent-up demand to shop reflected in rocketing footfall this spring, the pandemic has had a deep and lasting effect on the retail landscape.
E-commerce has left a deep imprint on the way consumers have shopped over the last year and has dented confidence in the ability of physical rail to bounce back. In turn, property values and rents, particularly for premium addresses, could be hit in the years ahead.
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