Milano Shopping - Jones Lang Lasalle

Transcription

Milano
Shopping
The JLL guide to High Street retail real estate in Milan
In collaboration with
Preface
In the dynamic world of retail, the high street is attracting growing interest. Despite the crisis, high street and
luxury goods retailers have successfully resisted the
difficult economic climate. Within this context Milan
retains its fashion capital reputation, with top notch international retailers having recently opened or being
about to open new stores there, often their first Italian unit. These include, among others, Hackett, COS,
Le Coq Sportif. Existing retailers are recording better
performances on Milan’s high streets than across the
rest of their portfolio, whilst Burberry, Damiani and Valentino for instance, have also renovated their offer with
new flagship stores.
This report aims to offer an insight in Milan’s high street
property market, looking at luxury and mainstream
high streets locations, so as to provide both specialist corporate and investors clients with an outlook on
this dynamic market segment. We firstly provide an
overview of Milan’s retail economy, looking at its retail
fundamentals and its strengths, also putting it in context against the broader international arena. We then
illustrate the emerging trends in Milan’s high streets
and through emerging policy changes that we expect
to influence Milan’s retail property sector. Finally, we
introduce the nine high streets analysed by presenting
a short profile of each of them.
Contents
Preface
Key messages
Milan consumers outlook
Milan in the International retail property hierarchy
Milan’s retailscape
The policy context
Milan high streets
Methodology
3
5
9
15
19
31
35
73
This project is the result of the collaboration of Jones Lang LaSalle and Sincron Inova. Jones Lang LaSalle is a Real Estate consulting company with extensive
experience with both corporate as well as investors Clients. Jones Lang LaSalle retail market knowledge makes it advisor of choice for operating in the Italian
market. Sincron Inova is a consulting company developing economic and statistical research to provide value-added analysis, trends, estimates and simulations
to support retail industry players with their investment and strategic decisions by providing them. While all information is provided to the best of our knowledge, we
assume no liability for the correctness of the information Jones Lang LaSalle’s knowledge of retail market, together with the over 40 years’ experience of Sincron
Inova, has allowed an in-depth qualitative and quantitative analysis of this important business segment that apparently knows no setbacks for the crisis. We would
also like to thank Franco Benatti, Pietro Croce, Avv. Guido Inzaghi and Prof. Luca Tamini for their time and for contributing to our work.
Key messages
Milan at the top of the retail property ladder
While Italy is facing challenging times because of contingent and structural economic problems, it still is the
fourth EU economy by GDP size. Milan features an
even more positive consumer economy. Ranking 10th
among the JLL EU cities sample by purchasing power
it also benefits from a large and varied potential consumer base, including its wealthy residents, business,
fashion and design tourists, and students. It ranks fifth
among the top attractive cross-border retail destinations in Europe, and it is third by presence of top 100
luxury brands. The rate of new openings confirm that
the City is still a destination of choice for Italian and
International retailers.
Looking at rental values, Via Montenapoleone is
among the top ten luxury streets in Europe, and Corso
Vittorio Emanuele II and Corso Venezia see values
in line with London Sloan street and Paris Boulevard
Saint Germain.
Targeted expansion
Retailers are adopting increasingly structured property portfolio strategies, aiming to maximise revenues
in whichever location is best suited. This results in a
targeted expansion pursued by both mainstream high
street and luxury retailers, and Milan is scoring high on
their priority list. According to the Jones Lang LaSalle
2011 Cross Border Retailer Attractiveness Index, Milan
is the fifth top attractive cross-border retail destination
in Europe, after only London, Paris, Moscow and Madrid. It is also third after Paris and London in terms of
presence of top 100 luxury brands.
Specialised locations
Milan is experiencing an increasing specialisation of its
shopping experiences, with prime pitches in increasingly strong demand. As elsewhere in Europe, retail
destinations increasingly need to offer an all-round
shopping experience which includes a specialised retail offer so that consumers can compare offers, designs and quality, and shop around for the best value
for money as well as for the quality they are looking
for. Clustering is therefore a growing feature of Milan
Milano
Shopping
5
high streets, as for Via Torino urban fashion and phone
& accessories, or sportswear in Corso Buenos Aires.
This means that retailers are increasingly aware of the
benefit from proximity to top performing competitors
and that offbeat locations risk becoming more peripheral.
Room for expansion for International retailers
Of the 153 international brands considered in the JLL
Cross Border Retailer Attractiveness study1, more than
60 are yet to enter the Italian market. These include,
for instance, high street giants TopShop, Uniqlo and
Urban Outfitters just to name a few. Large international
department stores are also missing, like Debenhams
and Marks & Spencers. Coupled with evidence of a
relatively solid performance of good high street location, this suggests that some of the brands that are currently missing from the Italian streets may in fact want
to consider an entry.
Luxury still shining brightly
A market segment that has faced the bad weather
even better than others is that of luxury goods. From
6
Milano
Shopping
a real estate perspective, the increased competition
for consumers’ attention and spending in an increasingly globalised and multichannel shopping world
have led high-end brands to enter new markets and
also renovate or expand existing stores or relocating
to more strategic areas. Furthermore, fashion houses
are working to leverage on their location and rationalise their networks. Newcomers are increasingly more
interested in locating their shops in prime locations
and especially near top-level brands, trying to benefit
from spill over effects. This trend is creating additional
demand for the already scarce space supply in high
streets, sustaining rent levels despite the wider economic environment.
High Street: A core option
From an Investment point of view, Italian High street
retail is also becoming an increasingly core option for
national and international investors alike. This reflects
into transacted volumes reaching almost €900 mln
up to Q4 2011, over 10 properties transacted. This is
against 16 out-of-town retail schemes transactions, accounting for just over €1 billion over the same period.
1
http://www.joneslanglasalle.eu/
emea/en-gb/pages/newsitem.
aspx?itemid=24393
No further activity has been recorded so far in Milan in
2012, but Q1 has been a relatively quiet quarter across
all commercial sectors and also in the rest of Europe.
2
http://www.bbc.co.uk/news/ukengland-london-11853632
3
http://www.newwestend.com/
Retail and the High Street
An increasing number of shoppers going back into the
City Centre has gone hand in hand with urban policies aimed at revitalising existing high streets giving
new impetus to areas that had lost some of their lustre,
capitalising on the unique setting that Town Centres
still offer relatively to a certain degree of homogenisation of the retail offer. In the usual virtuous circle that
affects most of urban dynamics, this has been associated to a renovated interest by all types of retailers
in Milan’s high streets. National brands seeking repositioning like OVS on Via Torino, International brands
looking for a successful first move in the Italian market
such as Banana Republic on Corso Vittorio Emanuele
II, or brands aiming to strengthen their competitive position by expanding and refurbishing existing spaces
as for instance the new Bershka flagship store again
on Corso Vittorio Emanuele II.
The location of the nine selected streets and the cur-
rent retail offer both suggest that there is room for iconic brands and targeted place-marketing initiatives to
further increase the liveliness, and in turn footfall and
potential sales, of some of the studied areas. Looking
at examples abroad, Primark and Selfridges, on the
quieter end of Oxford Street towards Marble Arch, and
the Abercrombie & Fitch store on the Champs Elysées
in Paris, all attract vast amounts of shoppers, including
tourists that get drawn to the iconic, albeit in very different ways, stores. Think also of the traffic-free shopping
days in London’s Oxford and Regent’s street, which in
2012 reportedly brought one million shoppers to visit
the area over the weekend2. And, in the same area,
think of private management company New West End
Company and all the services it offers to shoppers and
retailers alike3, which effectively provide an out-of-town
gallery shopping experience in an high street setting.
Milano
Shopping
7
Milan consumers outlook
Milan is Italy’s prime world city in the global city network4. Despite the weak performance of the Italian
economy over the last ten years Milan is still in a
strong economic position, producing 9% of Italian
GDP, featuring a concentration of corporate activities
and ranking 10th among the JLL EU cities sample by
purchasing power. Accordingly it also benefits from a
large and varied potential consumer base: Milan ranks
8th out of 55 European cities by population size, it features a large student population attending some of the
top state and private universities, and hosts a large
number of fashion and design events adding to more
conventional business tourism.
4
http://www.lboro.ac.uk/gawc/rb/
rb377.html
5
Data refer to the Provincia di
Milano
Milan retail economy
Balancing growth and budget savings is proving difficult for all European countries. Italy is facing greater
challenges due to market perceptions of country risk,
particularly in light of the EU governance crisis, and
structural economic issues. A sticky and dycotomic
labour market with young people and women being
mostly disadvantaged, and public spending inefficiencies are now an additional hinder to Italy’s recovery.
Nonetheless Italy remains the fourth largest economy
by GDP behind Germany, the UK and France, with a
GDP which is one time and a half that of Spain and
only 20% lower than France’s.
Although the recession has officially set back in in Q4
2011 in Italy, Milan retains its position in the global city
network, and the retail market is as lively as ever as
suggested by Prada’s recent bidding for the Galleria
Vittorio Emanuele II space. Milan is the most dynamic
of Italy’s metropolitan areas, as well as its commercial
and financial heart. With over 1.3 millions residents
within the city boundaries and 3.1 millions living in the
overall metro area5, Milan ranks 8th out of 55 European
cities by size. Per capita GDP has been relatively stable since 2006, and while current economic forecasts
have put forward the hopes of growth until at least
2013, Milan is expected to maintain its advantage over
the national averages.
From a retail point of view, Milan shows a favourable economic environment. Gross disposable income
and gross consumption per capita, at over €28,000
(€25,500 in the Province) and over €21,000 respectively in the City, are higher than the Regional and
Milano
Shopping
9
10 Milano
Shopping
Milan, Consumer economy indicators,2010 and 2011
30.000
25.000
20.000
15.000
10.000
5.000
0
Gross disposable income per Gross consumption per capita
capital (€)
(€)
City of Milan
Province of Milan
Lombardy
Italy
GDP per capita (€)
40.000
Italy
30.000
20.000
10.000
2020
2018
2016
2014
2012
2010
Province
of Milan
2008
-
2006
National figures. Consumer spending is expected to
grow by 1% per annum up to 20156. With a purchasing
power of €22,100, Milan ranks 10th among the JLL EU
sample. Looking at income earners, 24% of inner city
residents, twice as many as the Italian average, earn
more than €33,500 and 12%, more than twice the Italian average, earn more than €50,000. Moreover, Milan
specialisation in fashion and design is known worldwide.
Indeed, shopping tourism is a significant segment on its
own. Milan is one of the fashion capitals of the world; in
fact, it houses many of the most famous designers. In
February and September it hosts Milan Fashion Week,
one of the four primary yearly fashion events alongside
Paris, London and New York. Such events have helped
Milan establishing a role for itself as a shopping destination. According to a research by the IULM University,
70% of tourists report shopping to be the primary or
secondary reason for visiting Milan. Moreover 42% of
those arriving in Milan decide to prolong their visit in order to shop. Among other fairs, the Milan International
Design Week (Salone Internazionale del Mobile), held
in April, also attracts operators and visitors from all
Source: Gross disposable income and gross consumption per capita, Sincron
Inova 2010. GDP per capita, OEF data as of 12/03/2012
Milan, % of income earners by income levels, 2010
Source: Sincron Inova 2010
6
over the country and abroad.
Milan visitor flows, due to its business and shopping
relevance at the National and International level, peak
between February and May and September and October. The opening of a new conference centre called
Mico close to the former Milan Fair area (where the
CityLife development is taking shape), with a capacity
of 20,000 people, confirms the importance of business
tourism in Milan. Further demand is also expected to
arise as a result of the 2015 Expo, which could generate visitors flows for further 20 millions. International
business visitors represent 60% of all annual overnight
stays, mostly from Germany, the US and Russia. The
luxury hotel market benefits from such flows, displaying high occupancy and average revenue per room
figures. The business visitors base contributes significantly to luxury shopping vitality in the City.
And on a specialised website Milan is the third recommended best shopping vacation in the world after New
York and Paris7.
Oxford Economics data 2011
7
http://www.tripadvisor.com/
Inspiration-g1-c5-World.html
Milano
Shopping 11
Milan and EU 27, GDP per capita at
NUTS 3 level, 2011
Source: Jones Lang LaSalle on 2011 Oxford Ecaonomics Data, 2012
Milan, tourism as economical factor, 2010
Overnight guests
Arrivals in total 2010
N (mln)
5.6
Of which from foreign countries
2.8
Overnight stays in hospitality industry 2010
11.6
Of which from foreign countries
6.2
Duration of stays in average
Increase of overnight stays 2009 to 2010
% out
of total
51%
53%
2 days
0,1
Source: Osservatorio del Turismo, Provincia di Milano, 2010
8
http://www.bloomberg.com/
news/2012-06-12/italy-is-unlikelyto-need-emergency-rescue-fitchsays.html
Retail fundamentals and outlook
In the last two years Italy’s historical structural economic inadequacies have suddenly become a major
source of concern to International investors. This has
been driven by the sovereign debt crisis and the further
political turmoil arising at the EU level, culminating in
Standard & Poor’s decision to downgrade Italy’s rating
alongside other 15 Eurozone countries, and to give it a
negative outlook. With a renewed concern over southern Europe economies, a worsening of the outlook for
Spain and uncertainty over the Greek situation, Italy
was once again in the spotlight in June, despite Fitch
statement that it is unlikely to need a bailout as its
economy is in a much better state than Spain8. The
key retail indicators suggest that 2012 will be a tough
year for retailers. The contracting output and growing
consumer prices and unemployment are expected to
affect Italians’ consumption behaviour. Consumer confidence, down year on year and also quarter on quarter
in December 2011, is now up 5% Q-o-Q in March, but is
still below the base year (2005). Consumer sentiment
reflects negatively on aggregate retail sales forecasts,
which are expected to further decline both in Italy and
Milano
Shopping 13
the Milan province in 2012 and 20139.
The current economic environment can contribute to
shaping a new consumer economy in Italy, as is already happening elsewhere. Italian consumers are
somehow catching up with their European counterpart in the search for a more complete and informed
shopping experience. According to GFK Eurisko the
economic crisis is expected to lead to not to a plain
reduction in sales, but to a broader change in attitude
towards consumption. Their annual “Climi di consumo”
survey has recorded a contraction in both leisure
and clothing expenditure, but also a sustained interest in brands which have managed to establish their
reputation and whose demand is now less sensitive
to promotional campaigns; a fifth of consumers is still
favouring quality over price. Values of quality, sociality and tradition have survived the recession, with a
more complex concept of consumer experience that
will be increasingly sought after. At the same time, the
substantial growth in online luxury retailing and good
performance recorded by luxury factory outlet centres
suggest that consumers are still looking for aspirational
buys but are becoming more savy and more flexible
14 Milano
Shopping
in the forms they purchase them. Affordable luxury is
something that consumers are increasingly interested
in. Small luxury items with relatively low unit costs, like
make up or eyewear and other small accessories, are
the product types that consumers indulge in, having to
curb their expenditure on more costly items.
On the supply side, emerging national and local planning policy point to opportunities for change on Milan’s
high streets. New legislation has been recently introduced deregulating retail opening hours and removing
regulatory constraints to the expansion of commercial space both in and out of town. Such measures
are expected to foster growth in the medium to long
term, as well as contributing to a change in consumers
behaviour. On the other hand, tax reforms as well as
pension and labour market reforms may depress retail
fundamentals in the short term, with the Corte dei Conti
(the official Italian auditing body) suggesting that the
estimated total tax pressure at 45% may conflict with
proposed growth objectives. A more detailed overview
of the main policy initiatives and their implications for
high streets in Milan and across Italy is presented later
in the report.
9
Oxford Economics forecasts
Milan in the International
retail property hierarchy
Despite the economic crisis Milan is still one of the
most attractive retail locations worldwide. With brands
looking for profitable cities to expand in, the concentration of Italian and International brands as well as the
number of recent luxury and mainstream high street
openings confirm that Milan’s attractiveness to retailers has not subdued. Rental levels are also appealing
to retailers, with the nine analysed streets presenting
a wide range of potential locations for retailers with different budgets and market positioning.
The international competition for brands
Over the last few years Milan has seen unprecedented
interest by high street retailers of all price ranges and
standing. Hackett has recently opened in Corso Venezia, snapping up a large and visible unit, COS has
opened in the former Armani store in Corso Venezia,
and Comptoir des Cotonniers and Zadig & Voltaire
have brought Parisian chic to the City in Corso Vercelli.
This is the result of an increasingly structured property
portfolio strategy pursued by retailers, aiming to maximise revenues in whichever location is best suited.
The target may be a fast growing geography or an
established rich one, but also one in which short term
losses may be counterbalanced by a positive impact
in terms of visibility in the market place. In the current
challenging economic climate retailers are even more
careful in unearthing pockets of growth which have
been untainted by the crisis.
This approach of targeted expansion is shared by both
mainstream high street and luxury retailers, and Milan
is scoring high in their priority list. According to the
Jones Lang LaSalle 2011 Cross Border Retailer Attractiveness Index, Milan is the fifth top attractive crossborder retail destination in Europe, after only London,
Paris, Moscow and Madrid. For a number of the luxury
and mainstream international brands considered Milan
is the only Italian city in which they are active, as is the
case with Abercrombie & Fitch and Banana Republic.
Looking at luxury retailing in particular, with the most
important European markets by sales being Italy,
France, the UK, Germany and Russia, no other retail
sector is as internationalised as the market for luxury
goods. Europe remains the most important one worldwide, representing about 40% of the total turnover of
retailers such as LVMH and Hermès. The JLL “Glitter
Milano
Shopping 15
& glamour shining brightly” study of the 100 most renowned luxury brands and their presence in Europe’s
metropolitan centres found that Milan is only third after Paris and London in terms of presence of top 100
luxury brands. Chloé, Marc Jacobs and Ralph Lauren,
which were not considered in the 2011 Luxury Retail
study, have chosen Milan as their only Italian location.
Recent luxury openings and refurbishment include
Stella McCartney, Burberry Brit and the new Louis Vuitton Flagship store.
Among the top three, Milan is also the city with the
highest density of top luxury brands, when compared
against its size by population.
Rental levels across Europe
Via Montenapoleone, in the heart of Milan’s Quadrilatero della Moda is the fourth most expensive street
in Europe. This puts Milan’s luxury street at the top of
the global retail property hierarchy: the concentration
of luxury brands and the visibility of any new opening
in such a context clearly comes at a dear price for retailers.
Moreover, Milan is well positioned across the entire
16 Milano
Shopping
Europe, Number of top luxury brands by city, 2011
154
Paris
London
Milan
Moscow
Rome
Madrid
Munich
Berlin
Barcelona
Zurich
Hamburg
Dusseldorf
Brussels
Prague
Frankfurt
Vienna
Istambul
Amsterdam
Antwerp
Budapest
Warsaw
125
87
66
59
47
46
38
36
33
32
30
30
28
28
28
27
22
13
12
8
-
50
100
Source: Jones Lang LaSalle, 2011
150
200
Europe, Number of top luxury brand stores and city
market share, by population, 2011
16
14
London
Population, mln people
12
Moscow
Paris
10
8
Madrid
6
4
Milan
Rome
2
-
-
rental price range though, offering a variety of locations
suitable for all pockets and desired market standing.
Corso Venezia, where Hackett has recently opened
its first Italian store, and Corso Vittorio Emanuele II,
sit alongside Sloane Street and Boulevard Saint Germain in the €3,000 to €6,000 rental bracket. All the
other streets we have analysed feature notional prime
rents below the €3,000 threshold. One would however
be misled if concluding that Milan high streets are affordable retail locations. Unit size and, most of all, key
money is crucial in determining effective rents and
relatively low notional rents may be associated with
substantial key money levels.
50
100
150
Number of luxury brand stores
Source: Jones Lang LaSalle, 2011, and Eurostat 2012, INSEE 2012, ONS 2012,
Russian Office for National Statistics 2012, Turkish office for National Statistics 2012
and iamsterdam.com
Milano
Shopping 17
Europe, Luxury shopping streets, Prime rents in Euro/m²/year 2011 – 2012
Source: Jones Lang LaSalle, 2011 and 2012. Prime rent is defined as the EUR price per sqm and year of a sustainable rent that can be achieved for a newly let notional space in
an absolute prime location. Such an assumed unit is characterized by a sales area of 100 to 200 m2, stair-free ground-floor access. Rental levels in the Galleria Vittorio Emanuele
II reflects its public ownership. There is talking of a mixed public – private ownership in the future, which may be expected to influence rental values.
Milan retailscape
Milan City Centre features one of the most vibrant retail scenes in Italy and Europe, with around 500,000
m² retail space. JLL Research has analysed the nine
most important high streets in Milan City Centre, those
with the greatest historic and commercial relevance in
Milan and that cover the entire range of mass to middle
up to luxury retail markets.
Our analysis shows the retail offer is evolving in Milan,
as is the entire shopping experience consumers can
find. The map in Figure 8 shows the location of the nine
streets analysed, which are Corso Vittorio Emanuele
II, presented at the 2011 MAPIC fair; Via Montenapoleone; Corso Venezia; Via Manzoni; Via Dante; Corso
Buenos Aires; Via Torino; Corso Vercelli; and the Galleria Vittorio Emanuele II, the “Salotto di Milano” and
oldest shopping gallery in Europe, which many others
have adopted as a model and where Fratelli Prada
opened their first shop in 1913.
More specialised high streets are emerging as a result
of a mix of dynamics that have transformed high streets
elsewhere in Europe. On one hand there is a tendency
of retailers to cluster close to their competitors in order
to benefit from spillovers from established brands as
well as to attract their shoppers on one hand. On the
other shoppers have become and prefer a single retail
destination for their shopping to better satisfy their retail needs, and sometimes more affordably, as well as
to have a more holistic retail and shopping experience
strolling along the city .
Also, large retailers with stores across the globe and
attention-grabbing flagship stores are increasingly present on Milan’s high streets. This does not mean that
high streets are the same here as anywhere else in
Europe: indeed the majority of chain stores belong to
large and globalised Italian brands. In Corso Vittorio
Emanuele II for instance the area has retained its traditional mixture of luxury mono and multi brand stores
(for instance Max Mara, Vergelio and Gobbi) and numerous upper end brands epitomising good quality and
design made-in-Italy products, such as Luisa Spagnoli,
Max&Co, Pennyblack, Pollini, and Furla among others.
The presence of an increasing number of recognisable brands, the relatively positive performance of high
street shops compared to other locations, and the relative opacity and private nature of the market, all contribute to making the High Street an increasingly core
Milano
Shopping 19
Via Montenapoleone
C.so Buenos Aires
Via Manzoni
C.so Venezia
C.so Vittorio Emanuele II
Galleria Vittorio Emanuele II
C.so Vercelli
Via Dante
Via Torino
Milan, The nine high streets
considered in this report
Source: Jones Lang LaSalle 2012
Corso Vercelli
Via Torino
Corso Buenos
Aires
Via Dante
Via Manzoni
Corso Venezia
Via
Montenapoleone
Galleria Vittorio
Emanuele II
Corso Vittorio
Emanuele II
Milan, Estimated footfall at selected high streets
Source: Jones Lang LaSalle’s elaboration on Sincron Inova and Jones Lang LaSalle
data, average between recorded footfall 16/04/2011 e 22/04/2011
option for investors. Moreover, returns which put Milan
in a favourable position compared to other European
cities mean that there is also room for new international investors to start considering it as a potential target
location for their pots.
Specialisation: hotspots become hotter
Milan is experiencing an increasing specialisation of its
shopping experiences. Over the last few years defined
hierarchies have been emerging within and among the
different shopping districts. For instance, Corso Vittorio
Emanuele II has strengthened its reputation as the top
location for all clothing and accessories retailers, from
upper-end (e.g. Luisa Spagnoli or Furla) and luxury
Italian brands such as Max Mara, to International high
street giants like H&M and Gap. The priority destination of choice for most high street retailers for an entry
in the Italian market, footfall is the highest of all the
streets considered in this study, with just under 18.000
people per hour on average.
Despite the proximity, footfall in Galleria Vittorio Emanuele and via Dante is around a quarter of this. Retailers have so far shied away from opening stores
Milano
Shopping 21
22 Milano
Shopping
Milan and London, Distribution of shops by product
type in selected high streets, % of total retail units
100%
90%
80%
70%
60%
50%
40%
30%
20%
Corso Vercelli
Via Torino
Corso Buenos Aires
Via Dante
Via Manzoni
Corso Venezia
Via Montenapoleone
0%
10%
Corso Vittorio Emanuele II
in these two locations,, in addition to those in Corso
Vittorio Emanuele II, presumably on the basis that
Corso Vittorio Emanuele would cannibalise their sales.
Indeed of the 55 retailers with a store on Corso Vittorio Emanuele II only 12 are also present in via Dante,
and only two in the Galleria, Nara Camicie and Luisa
Spagnoli.
In general, prime pitches are in even stronger demand:
in Europe online retailing and a wider drive towards
affordable shopping are driving consumers to more
focused shopping trips. This phenomenon is also increasingly visible on Milan’s high streets, think of the
telephone cluster in via Torino towards the Carrobbio
area, or of via Dante’s children stores. These pull factor helps sustaining rents despite the weak economic
environment. Retail destinations increasingly need to
offer an all-round shopping experience which includes
a specialised retail offer so that consumers can compare offers, designs and quality, and shop around for
the best value for money as well as for the quality they
are looking for. This means that not only do retailers
benefit from proximity to top performing competitors,
but that they actually risk missing out by choosing a
Oxford
Street
Source: Jones Lang LaSalle’s
elaboration on Sincron Inova and
Jones Lang LaSalle data, as of
09/04/2012
Milan, Vacancy rate, % of total estimated
frontage length in metres
2% 0% 6% 5% 3% 1% 5% 4% 8%
Vacant
Next opening
Corso Vercelli
Corso Buenos Aires
Via Torino
Via Dante
Via Manzoni
Corso Venezia
Via Montenapoleone
Galleria Vittorio…
Retail,
Leisure and
Local
amenities
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Source: Jones Lang LaSalle’s elaboration on Sincron Inova and Jones Lang
LaSalle data, as of 09/04/2011
location that may appear sheltered from competitive
pressures. This may happen at the expense of locations off the beaten track, unless these develop some
really unique shopping experience that turns them into
a leisure destination (think of the niche offer of the
Brera area in Milan or of Camden Town in London).
We all need a flagship store
Sometimes prime pitches do not offer the retail unit
that retailers look for. With vacancy rates effectively
at or well below frictional levels across all the high
streets considered it is reasonable to expect that the
unit that a retailer wants may occasionally be unavailable. Indeed local operators suggest that, at least for
the streets analysed, the owners of the few units which
were vacant at the time of recording already had new
tenants lined up for the space. As mentioned before,
retailers are increasingly looking for proximity to other
top-level brands. They are also seeking increasingly
visible retail units which allow them to develop an
all-round unmatched shopping experience. Flagship
stores, which draw consumers into the brand’s world
and aim to foster loyalty and stimulate impulse buys,
Milano
Shopping 23
24 Milano
Shopping
Milan and Berlin, distribution of shops by unit size in selected
high streets, % of total estimated frontage length in metres
>= 1000
500 - 999
250 - 499
100 - 249
Via Torino
Corso Vercelli
Via Dante
C.so Buenos A.
Via Manzoni
C.so Venezia
G. V. Em II
Via Monten.
< 100
elaboration on Sincron Inova and Jones
Lang LaSalle data, as of 09/04/2012
>= 1000
Wilmersdorfer
strasse
Potsdamer
Platz
Schlosstrasse
Hackescher
Markt
Alexanderplatz
500 - 999
Friedrich
strasse
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
N.a.
C.so V. Em II
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Ku'damme &
Tauentziestrasse
are more and more a key element of retailers’ marketing strategy. Such stores also tend to be relatively
large in size, as recent openings seems to suggest,
both in Italy (the new Burberry store falls in the 250
- 499 m2 size bracket, and the Hackett one in the 500
- 999 m2) and abroad (see for instance the new Miu
Miu flagship store in New Bond street). Such units are
rather scarce across all the analysed high streets, with
the exception of Corso Vittorio Emanuele II, the Galleria and Corso Venezia. Also, fragmented ownership
means that organic growth by acquisition of adjacent
units is more difficult to achieve; this imposes an additional constraint to retailers’ location choices.
High demand for visible and high quality space close to
competitors on one side, together with the limited availability of such space, is starting to lead retailers to be
more open-minded in their search for new store space.
This is for instance what is being reported in Paris, and
may well happen in Milan. Therefore while Montenapoleone, Corso Vittorio Emanuele II and Corso Buenos
Aires may be top of the list in the priority ranking of
National and International retailers (if they can afford
rents and key monies), it may be that it is the other
100-499
< 100
Milan, Chain store penetration in selected high
streets, % of total estimated frontage length in metres
Amenities/
Non-retail
services/
Vacant
Independent
Corso Vercelli
Corso Buenos Aires
Via Torino
Via Dante
Via Manzoni
Corso Venezia
Via Montenapoleone
Chain
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
10
The Wall Street Journal (tiered
subscription only)
high streets that they will eventually open up stores in.
Think, for instance of Stella McCartney opening in via
Santo Spirito, and Pirelli and COS in Corso Venezia
(both have stores on Regents Street in London)10.
An International high street?
There is often a presumption that high streets are becoming increasingly anonymous across Western cities,
with globalised brands taking over small local retailers.
It is also often argued that foreign retailers are slowly
becoming dominant. It is definitely the case that chain
retailers are gaining space, with chains representing
more than 60% of estimated frontage length across
all high streets except the Galleria Vittorio Emanuele
II (where amenities occupy a larger portion of space).
The vast majority of brands, however, are Italian, including large Italian retailers with an international
presence. These are no longer only top-end luxury
brands, like Prada, Dolce & Gabbana and the likes,
but also high street brands like Intimissimi, which is
now present across London, including the two Westfield in-town shopping centres, Coccinelle, Frette and
Kiko, to mention but a few across a range of product
Milano
Shopping 25
Milan, Distribution of shops by retailer type in selected
high streets, % of total estimated frontage length in metres
Amenities/ Non-retail
services/ Vacant
Foreign International
Italian - Italy
Corso Vercelli
Via Torino
Corso Buenos Aires
Via Dante
Via Manzoni
Corso Venezia
Via Montenapoleone
Italian - International
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
types. According the JLL 2011 Cross Border Retailer
Attractiveness study, Italy is the 6th top exporter of retail formats across Europe, following the USA, the UK,
Germany, Spain (which is growingly present with its Inditex brands including the latest Oysho and Zara Home
stores in Via Torino) and France.
Out of the 26 retailers which are present with more
than four shops each across the high streets considered, 19 are Italian brands as shown in Figure 15.
This is also true across Europe in the luxury segment,
with about half of the 25 most present luxury brands
being Italian.
26 Milano
Shopping
Europe, Top 25 luxury brands, number of
stores in luxury shopping high streets
Figure 15: Milan, Top brands by number
of shops, selected high streets
Brand
Nara Camicie 8
Geox
TIM6
Vodafone
Yamamay6
Kiko
Limoni
Nadine
United Colors of Benetton5
Foot Locker
Calzedonia
H&M
Intimissimi5
Tanagra
Prada4
Luisa Spagnoli
Vergelio
Wind
Marilena4
Sephora
Swatch
Salmoiraghi & Viganò
Levi's
Camicissima
Carpisa4
3 Store
Number of
shops
8
7
6
6
6
6
5
5
5
5
5
5
5
4
4
4
4
4
4
4
4
4
4
4
4
4
Source: Jones Lang LaSalle’s elaboration on Sincron Inova and Jones Lang LaSalle data,
as of 09/04/2011
Hugo Boss
41
Max Mara
35
Gucci
29
Cartier
28
Louis Vuitton
28
Prada
27
Escada
26
Burberry
25
Hermès
24
Mont Blanc
24
Salvatore Ferragamo
23
Chanel
22
Ermenegildo Zegna
22
Bulgari
21
Ralph Lauren
19
Tod's
18
Tiffany & Co.
15
Bottega Veneta
14
Chopard
14
Giorgio Armani
14
La Perla
14
Paul Smith
14
Valentino
Source: Jones Lang
LaSalle, 2011
13
Christian Dior
12
Jimmy Choo
12
Versace
12
Yves Saint Laurent
Number of stores
12
01
02
03
04
Milano
05
0
Shopping 27
28 Milano
Shopping
Italy, Prime retail net yields by sub-sector, %, Q1 2012
7.50
Retail
Warehousing
, 7.25
7.00
6.50
Shopping
Centre ,
6.25
6.00
5.50
5.00
High Street
Milan, 4.75
4.50
3.50
Shopping Centre
High Street Milan
Retail Warehousing
2012 Q1
4.00
2007 Q1
2007 Q2
2007 Q3
2007 Q4
2008 Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
2010 Q2
2010 Q3
2010 Q4
2011 Q1
2011 Q2
2011 Q3
A core option for Investors
The high street segment was a major contributor to the
record 2011 Italian retail investment volumes, with just
under € 900 mln out of the almost €2 bln worth of publicly recorded retail deals. Two of the five deals greater
than €100 mln are high street deals.
In addition to the large size and importance of some of
the assets transacted, the involvement of listed REITs
(for instance like Immobiliare Grande Distribuzione),
corporates (like Diesel and Nero Giardini) or funds and
vehicles (like Gruppo Statuto and BNP’s Fondo Mario
Negri) has also contributed to a more transparent High
Street market in 2011. And although it would be misleading to compare 2011 figures with 2010 results, due
to the mainly private nature of deals recorded in the
High Street segment, it is meaningful that in 2011 a
number of non-private investors have been active.
Net yields have seen a compression, particularly for
trophy assets, like the Apple Store in Bologna, as well
as for owner occupier deals, as was the case for the
Diesel store in Piazza San Babila, Milan, and the Nero
Giardini one in Corso Venezia. The quality of the asset,
its macro-location (city) and micro-location (street, and
Milan, High Street prime net yields against other
European countries, %, Q1 2012
13.00
11.00
9.00
7.00
5.00
3.00
Milan, 4.75
street position), the standing of the tenant, the possibility of reversion and the layout of the store all affect the
reliability of the expected cash flow and are therefore
key drivers of value.
At the same time, the private nature of most deals also
helps keeping prices up, either because private operators follow different logics from those of pure risk-return
analysis or because the availability of equity allows a
more aggressive behaviour. The High Street prime net
yield as of Q4 2011 was at 4.75% in Milan, compared
to a 6.25% yield for Shopping Centres, and are stable
in Q1 2012. However, prime net yields are not always
meaningful for High Street investors, whose main driver is often wealth preservation rather than investment
return.
The still limited transparency of the market does however affect the nature of investors, as does the currently fragmented ownership that is typical of high streets
in Milan as well as in other Italian cities.
While it is true that more non-private investors have
been active in 2011, almost all of them were from Italy.
From an International investor’s point of view finding
the right high street product is indeed complicated, due
Milano
Shopping 29
to the opacity of the market, and being competitive is
equally difficult when comparing against domestic private investors. Nonetheless, the performance of High
Street properties in Milan compared to other European
cities suggests that there is reason for international investors to keep an eye on the market despite historical
difficulties in securing investment opportunities.
With regards to the product itself, the amount of retail
floorspace within Milan historical centre is relatively
stable. The Excelsior luxury department store and the
redevelopment of the area currently hosting the Gap
and Banana Republic stores11 are the most recent additions to the area. New developments are now in the
pipeline, which could give a bit of a shake to the sector. The CityLife and Porta Nuova developments both
aim to bring a new retail parade in the city centre, and
in Via Torino the area adjacent to the FNAC store will
also deliver some brand new retail space. In total some
40,000 m² GLA are expected to come through over the
next two years, built to high specifications and with an
eye to modern international retail formats, which may
therefore appeal international investors.
In the shorter term, value added investment opportuni30 Milano
Shopping
ties are available in Milan, outside prime pitches and
suitable for retail specialists with a good knowledge of
retail product. In the next year or so (12 months) some
core product may also become available as existing
institutional owners revise their portfolio management
strategy and may decide to structure sale processes .
http://milano.corriere.it/milano/
notizie/cronaca/09_giugno_30/
galleria_shopping_corso_
vittorio_emanuele_spazi_
dismessi-1601519076405.shtml
11
The policy context
The potential implications of recent changes in legislation for the retail sector and Milan’s high streets in
particular are of interest to both retailers and investors. All the analysed high streets of course share the
broad regulatory setting in which retailers must operate. While specific buildings may be subject to listed
building regulations from which others are exempt, the
broader trade regulatory framework is common.
Deregulation, taxation and growth: the national
context
The “Save Italy” bill, presented in December 2011, and
the Deregulation bill, first presented in January 2012,
both aim to introduce competition and foster entrepreneurial initiative across a number of industries and the
public sector at national level. Most importantly they
aim to remove a wide range of restrictions currently
affecting the opening of new retail activities, both in
town centres and in out-of-town settings. Once fully
implemented the only limitations to new retail activities
will be those safeguarding public health, workers, the
environment (including the urban built environment),
and cultural heritage, with legislation imposing other
constraints to be repealed.
The implication for high street retail in Milan is twofold.
On the one hand the extension of the sales area is
likely to become easier to pursue, and on the other department stores and town-centre shopping centres are
unlikely to be opposed to on other grounds than the
ones listed above.
There is of course a degree of uncertainty as to both
the timeline for implementation and how strongly and
effectively regional and local authorities will oppose
such measures. However, the fact that the Government has indicated the end of 2012 as the deadline
for full implementation at all administrative levels, with
national elections not expected before 2013, suggests
the current caretaking Government may be able to introduce further measures. Also, there is a general feeling that changes have now been set in motion, and
maintaining the status quo may be too hard to achieve,
even with strong actors aiming to protect it.
In addition to regulatory changes, the Save Italy bill
also introduced amendments to residential and commercial properties taxation, with what is now known as
IMU (Imposta Municipale Unica, or Single Municipal
Milano
Shopping 31
tax). The expected impact of IMU on high street real
estate is twofold. Firstly there is an impact on consumers demand, as the latest legislation brings the IMU
forward to 2012 (it was initially due to be implemented in 2014) and can be therefore expected to affect
household disposable income. Secondly there is an
impact on property owners, via the higher revaluation
indices and tax rate with a potential uplift deriving from
a local additional rate on top of the national minimum
rate of 0.76%12.
Local planning policy: Natural Shopping Centres
At the town planning level, the Comune di Milano has
just approved the new city wide planning policy document (the Piano di Governo del Territorio, or PGT),
which is expected to be published in September/ October 2012. Apart from the uncertainties that are associated with the current legislative gap and the final
outcome of the PGT process, there is a specific policy
trend that is of relevance to the evolution of Milan’s
high streets.
Natural Shopping Centres (Centri Commerciali Naturali, or CCN) have over the past few years grabbed
32 Milano
Shopping
IMU Snapshot - June 2012
IMU Snapshot
Expected decline in asset values and rise in gross yields across
all commercial real estate sectors.
Likelye ffects on lease agreements as well.
As ingle standard rate forr etail, office and logistics properties,
subject to an increase or decrease determined at the municipal
level, although uncertainty will prevail until December 2012.
and
12
See JLL IMU Snapshot, June
2012, for an insight on the matter.
13
See: http://www.comune.milano.
it/portale/wps/portal/CDM?WCM_
GLOBAL_CONTEXT=/wps/wcm/
connect/ContentLibrary/giornale/
giornale/tutte+le+notizie+new/com
mercio%2C+attivita+produttive%2
C+turismo%2C+marketing
+territoriale/duc_distretti_
commercio
Italian local trade associations’ attention. These are
broadly defined as areas of the city hosting dense clusters of retail activities, within an area of at least 10,000
m2, and a number of policies are emerging across Italy
that aim to protect and foster the liveliness of such areas. In essence they represent the Italian response to
the international experiences of town centre management (see for instance http://www.atcm.org/ for some
UK references).
Within the emerging PGT a formal definition of CCN
for the city of Milan is being developed. The twofold
aim of this is to encourage further development of retail
activities within such areas as well as deal with some
of the negative externalities that are associated with
commercial areas, mostly when they are also host to
substantial night economy activities.
Already introduced by the previous City assembly,
Milan’s Retail Urban Districts (Distretti Urbani del
Commercio or DUC) are one of such Natural Shopping Centres as defined by the City of Milan. They are
also part of a programme that the Comune di Milano,
Regione Lombardia and private partners have developed, putting together a ring-fenced funding pot total-
ling more than €10 mln in 2010 aimed at regenerating
the retail units themselves, developing new client services within the DUC, improving transport accessibility,
safety and crime prevention and marketing and communication. A first group of DUCs has already been
implemented, and includes the areas of Brera, Isola
and Navigli, but on March 13th 2012 Corso Buenos
Aires and the Galleria Vittorio Emanuele II have been
included in the list of DUCs13.
The important implication for all High Street retailers
interested in the Milan market is that all urban retail aggregations that are included in the PGT Natural Shopping Centre definition can be expected to be subject
to a speedier planning application process for new
commercial space, and retailers will not be expected
to provide dedicated parking space, one of the largest
entry barriers for new retail activities within the historic
centre of the city. An example of this approach is the
new Excelsior just off Corso Vittorio Emanuele II, which
has developed an agreement with existing car parks in
the neighbourhood.
Milano
Shopping 33
Milan high streets
The pedestrianized Corso Vittorio Emanuele II
emerges as the top retailer destination in Milan,
with the maximum footfall across the analysed
high streets and a strong retail offer with a broad
range of powerful brands in mainstream Italian and
International retailers. Two upmarket department
stores are located within the Vittorio Emanuele area,
including La Rinascente on Corso Vittorio Emanuele
II and the Excelsior (Gruppo Coin) just off the Corso.
While H&M and Zara opened their first stores in Milan
in early 2000s, it was the opening of Sephora and
Gap in 2010 that paved the way for a wave of new
international openings, including the flagship and to
date only Italian Banana Republic store. Renovations
and expansions have also affected existing successful
stores, such as Liu Jo and Intimissimi as well as the
most recent Golden Point. There is also evidence of
other established foreign brands looking for space in
Corso Vittorio Emanuele II (Massimo Dutti has recently
36 Milano
Shopping
open its second store in the area in the former Gusella
store), with relatively high prime rents and key money
restraining new entrances.
The street now has a marked clothing vocation that
mirrors Milan’s fashion hotspot reputation, with 65%
of the total frontage length occupied by clothing and
accessories retailers. The overall feel of the Street has
improved significantly over the last 3-5 years, thanks to
greater attention to windows displays – see for instance
the Rinascente’s theme windows – and interiors design
– as for the new Jean Nouvel’s Excelsior.
Italian shoppers are being progressively exposed to
an experience that could so far be found on iconic
European high streets. Together with its retained
uniqueness, with more than 80% of brands on the
street still representing high street and upper end
Italian retailing, its accessible location, the historical
tradition of weekend strolling, and renewed retail offer
can all help explain a footfall of around 18,000 per hour.
Estimated % of total Number % of total
frontage frontage of units number of
units
length(*)
length
(*)
Total
807
Corso Vittorio Emanuele II, Distribution
by retailer type and by unit size, % of total
estimated frontage in metres 2011
62
11%
Of which by category:
Clothing
522
65%
36
58%
Accessories
69
9%
6
10%
Sport goods & Sportswear
10
1%
1
2%
Jewellery
17
2%
4
6%
Eyewear
Toiletries, Cosmetics & Beauty
Products
3
0%
1
2%
21
3%
3
5%
Books, Music, Toys & Gifts
62
8%
2
3%
Local facilities
48
6%
2
3%
Restaurants and Food
22
3%
3
5%
Vacant
16
2%
2
3%
Next opening
17
2%
2
3%
10%
15
24%
22%
Italian International
18%
Italian - Italy
49%
elaboration on Sincron Inova data,
as of 09/04/2012
20%
10%
< 100
15%
78
100 - 249
119
15%
11
18%
250 - 499
169
21%
14
23%
500 - 999
277
34%
14
23%
>= 1000
164
20%
8
13%
Foreign - International
176
22%
15
24%
391
48%
29
47%
Italian - Italy
Amenities/ Non-retail services/
Vacant
149
18%
11
18%
90
11%
7
11%
Of which by brand type (**):
38 Milano
Shopping
100 - 249
250 - 499
Of which by dimensional class (sqm):
< 100
500 - 999
21%
34%
>= 1000
Chain store penetration(**)
Out of frontage length
86%
Out of number of units
84%
Rate of international retailers Out of frontage length
22%
24%
Source: Jones Lang LaSalle’s elaboration on Sincron
Inova data, as of 09/04/2012
Footfall is per hour in peak time.
The retail unit indicated as Vacant between just after
via San Paolo is in fact a Golden Point which was being
refurbished at the date of data collection.
The Galleria Vittorio Emanuele II is traditionally
known as the Salotto di Milan and has been recently
recognised by the City of Milan as a Retail Urban
District (DUC), allegedly with the aim of protecting it
from pressures by powerful retailers with development
and growth plans that may be at odd with the City
Council’s vision of the Salotto. While always occupying
a prominent role in Milan’s shopping environment, the
Galleria has recently come to the spotlight following
the bid to occupy the current MacDonald’s store,
where Prada outdid Gucci and Apple pushing annual
rents up 150% over base level. This move will make
the Milan fashion group the largest single occupier in
the Salotto, with a total of about 30 metres of estimated
frontage length.
While the largest part of shops portraying Italian brands
40 Milano
Shopping
also operational abroad, and luxury Italian fashion
represented by Prada, Gucci and Tod’s, the majority
of the units are either amenities and local services
or mainstream retailers, with 32% of the estimated
frontage length occupied by bars and restaurants
(although the situation is expected to change with exit
of MacDonald’s). The entry of Massimo Dutti suggests
that the Salotto is also perceived as a good location for
higher end diffusion lines of mainstream retailers.
The availability of units of all size bands in a balanced
proportion as well as the potential opportunity to
expand retail space in the upper levels of the Galleria
buildings is further expected to appeal to retailers
looking for space in an iconic building with a high end
and luxury standing.
units
length(*)
length
(*)
Total
265
Galleria Vittorio Emanuele II, Distribution
by retailer type and by unit size, % of total
estimated frontage in metres 2011
42
13%
Of which by category Clothing
60
23%
10
24%
Accessories
36
14%
8
19%
3
1%
1
2%
Jewellery
8
3%
2
5%
26
10%
4
10%
Local facilities
10
4%
1
2%
86
32%
10
24%
Textiles & Soft Furnishings
8
3%
1
2%
Other
Telephones, Accessories &
Electricals
16
6%
4
10%
13
5%
1
2%
39%
26%
Italian - Italy
Amenities/
Non-retail
services/
Vacant
22%
as of 09/04/2012
20%
28%
< 100
100 - 249
Of which by dimensional class (sqm): 250 - 499
< 100
52
20%
18
43%
100 - 249
75
28%
9
21%
250 - 499
62
24%
9
21%
>= 1000
75
28%
6
14%
34
13%
5
12%
70
26%
11
26%
Italian - Italy
Vacant
57
22%
14
33%
104
39%
12
29%
Shopping
>= 1000
24%
Chain store penetration(**) Of which by brand type (**)
42 Milano
28%
47%
43%
Rate of international retailers Out of frontage length
13%
12%
Source: Jones Lang LaSalle’s elaboration on
Sincron Inova data, as of 09/04/2012
Via Montenapoleone
Via Montenapoleone is the epitome of Italian luxury
fashion, with more than 70% of estimated frontage
length occupied by single or multi-brand luxury and
upmarket stores, and over 50% by an Italian brand.
Recent openings include the new Burberry flagship
store replacing men tailor shop Corneliani, as well as
the Damiani and the Valentino flagship stores. As is
also happening elsewhere in luxury high streets across
Europe, retailers are more and more attracted by the
proximity to other top-level brands. Also, the need to
be highly visible and offer an unmatched shopping
experience is leading towards larger sales areas. This
44 Milano
Shopping
is what the size of recent openings seems to suggests,
both in Italy (the new Burberry store is above 500 m2)
and abroad (see for instance the new Miu Miu flagship
store in New Bond street). These two trends may limit
the ability of via Montenapoleone itself to host all those
who may want a shop there, resulting in a strengthened
position for surrounding streets, including via Verri.
Historically there is also a trend of retailers choosing
locations which are visible entering or exiting Via
Montenapoleone itself, as is for instance the case of
the historical Jil Sander store in via Pietro Verri and the
forthcoming Just Cavalli in Corso Matteotti.
units
length(*)
length
(*)
Total
478
Via Montenapoleone, Distribution by retailer
type and by unit size, % of total estimated
frontage in metres 2011
82
10%
Clothing
227
47%
36
44%
Accessories
88
18%
15
18%
Jewellery
84
18%
18
22%
4
1%
1
1%
Local facilities
4
1%
1
1%
11
2%
1
1%
Vacant
30
6%
4
5%
Telephones, Accessories &
Electricals
26
6%
5
6%
4
1%
1
1%
Other
9
2%
1
1%
20%
16%
Italian - Italy
Amenities/
Non-retail
services/
Vacant
54%
6%
as of 09/04/2012
6%
30%
12%
100 - 249
250 - 499
< 100
146
30%
39
48%
100 - 249
218
46%
32
39%
250 - 499
58
12%
5
6%
500 - 999
27
6%
2
2%
N.a.
30
6%
4
5%
96
20%
17
21%
259
54%
41
50%
Italian - Italy
Vacant
77
16%
18
22%
45
9%
6
7%
46 Milano
Shopping
< 100
500 - 999
N.a.
46%
77%
76%
Rate of international retailers
20%
21%
Corso Venezia
Corso Venezia is among the top three streets by
level of brand, alongside via Montenapoleone and
Via Manzoni. Hosting two Dolce and Gabbana stores
Vivienne Westwood alongside Burberry Brits first
European store and Prada, it is dominated by clothing
and accessories as well as food and restaurants serving
fashionistas and local workers alike. With just under
a quarter of the estimated frontage length belongs to
retail units above 1.000 m2 in size, and another 16%
to units between 500 and 1.000 m2, Corso Venezia is
only second to Corso Vittorio Emanuele II by presence
of large sized units.
48 Milano
Shopping
The Street is host to the first Italian COS store, opened
in May, H&M’s higher end diffusion line. Such an
opening confirms the Street’s appeal to National and
International retailers with an established high-end
and luxury position (or looking to establish one), in
relatively large sized units.
units
length(*)
length
(*)
Total
317
Corso Venezia, Distribution by retailer
66
16%
26%
Clothing
129
41%
27
41%
Accessories
44
14%
11
17%
Jewellery
10
3%
4
6%
Italian - Italy
Eyewear
Toiletries, Cosmetics & Beauty
Products
2
1%
1
2%
3
1%
1
2%
3
1%
1
2%
Local facilities
12
4%
2
3%
26
8%
7
11%
55
17%
3
5%
Leisure Services
5
2%
1
2%
Other
9
3%
4
6%
Next opening
2
1%
1
2%
Vacant
17
5%
3
5%
Amenities/
Non-retail
services/
Vacant
29%
29%
as of 09/04/2012
23%
32%
100 - 249
250 - 499
< 100
100
32%
38
58%
100 - 249
55
17%
10
15%
250 - 499
38
12%
7
11%
500 - 999
51
16%
6
9%
>= 1000
73
23%
5
8%
83
26%
10
15%
93
29%
23
35%
Italian - Italy
Vacant
91
29%
20
30%
49
16%
13
20%
50 Milano
Shopping
< 100
500 - 999
16%
>= 1000
12%
17%
63%
61%
26%
15%
Via Manzoni
With the large presence of Armani, alongside Valextra
and Vertu among others via Manzoni has got the
second highest incidence of luxury retail on the total
estimate frontage length, totalling just under 30%. A
new Armani Hotel, symbol of understated luxury made
in Italy, opened in November 2011. With another 30%
upmarket retail, the majority of the street is occupied
by high-end retailers across all product categories.
Despite such concentration of top quality brands
the street is not attracting the expected footfall; it is
possible that an urban environment which is less
pedestrian friendly that that of other high streets in the
area is contributing to quieter shopping flows.
52 Milano
Shopping
Together with Corso Venezia, via Manzoni is also host
to a greater variety of retail categories than Corso
Vittorio Emanuele II and via Montenapoleone, with a
large proportion of textile and soft furnishing outlets
including Italian upmarket brands Artemide, Driade,
Frette and Flou. It is also, with via Dante, the only high
street with a reasonable children retail presence.
The vast majority of units are below a 100 m2 in size
and only three greater than 1.000 m2 (all held by
Armani). The only unit between 500 and 1.000 m2 has
been picked up by Hackett for its recently opened first
Italian store.
units
length(*) length
(*)
Total
510
91
Clothing
180
35%
30
33%
Accessories
40
8%
7
8%
Jewellery
24
5%
7
8%
Eyewear
2
0%
1
1%
13
3%
2
2%
Toiletries, Cosmetics & Beauty Prod
4
1%
1
1%
Local facilities
43
8%
4
4%
20
4%
6
7%
97
19%
13
14%
Leisure Services
20
4%
4
4%
Children Wear & Nursery Goods
23
5%
5
5%
Telephones, Accessories & Electr
6
1%
1
1%
Other
14
3%
3
3%
Next opening
10
2%
3
3%
Vacant
15
3%
4
4%
< 100
217
43%
52
57%
100 - 249
148
29%
24
26%
250 - 499
64
12%
7
8%
Via Manzoni, Distribution by retailer type
and by unit size, % of total estimated
19%
16%
Italian Italy
39%
as of 09/04/2012
12%
3%
100 - 249
43%
12%
>= 1000
N.a.
29%
4
1%
1
1%
61
12%
3
3%
N.a.
16
3%
4
4%
83
16%
14
15%
196
38%
24
26%
Italian - Italy
134
26%
35
38%
98
19%
18
20%
54 Milano
Shopping
250 - 499
500 - 999
>= 1000
Amenities/ Non-retail services/ Vac
< 100
1%
500 - 999
Amenities/
Non-retail
services/
Vacant
26%
63%
54%
16%
15%
Via Dante
Via Dante has seen substantial changes since its
pedestrianisation in 1996, when the City Council
realised its plan for a long boulevard from Corso
Vittorio Emanuele II to largo Cairoli. From a retail point
of view it is now effectively the prolongation of Corso
Vittorio Emanuele II, benefitting from tourist flows
between the Duomo and the Castello Sforzesco as
well as from a healthy presence of shoppers and local
workers. This broad potential demand is reflected in
the fairly balanced mix of categories aiming to capture
it, including a large food offer (the highest across the
high streets considered, only second to Galleria Vittorio
Emanuele II).
The presence of International retailers is fairly
substantial but not dominating, in line with most high
56 Milano
Shopping
street considered, at around 22% of the total estimated
460 metres frontage length (including amenities). Le
Coq Sportif will soon open its first Milan flagship store
and Jacadi has just opened its own.
The complementarity with Corso and Galleria Vittorio
Emanuele II is confirmed by the fact that only five of the
15 International retailers in via Dante are also present
in those two streets. In total, out of 55 retailers in Corso
Vittorio Emanuele II, only 12 have also got a retail point
in via Dante. Conversations with operators confirm
that retail units in via Dante are appealing to retailers
(footfall is the fourth highest following Corso Vittorio
Emanuele II, Corso Buenos Aires and Via Torino), but
a second unit in Corso Vittorio Emanuele II would be
expected to cannibalise sales.
length(*)
length
(*)
units
Total
446
Via Dante, Distribution by retailer type
69
22%
26%
Clothing
173
39%
23
33%
Accessories
39
9%
8
12%
5
1%
2
3%
Italian - Italy
Jewellery
7
2%
2
3%
Eyewear
4
1%
1
1%
32
7%
6
9%
24
5%
2
3%
Local facilities
49
11%
6
9%
65
15%
10
14%
27
6%
4
6%
17
4%
3
4%
Vacant
4
1%
2
3%
23%
29%
Amenities/
Non-retail
services/
Vacant
as of 09/04/2012
8% 1%
< 100
10%
33%
100 - 249
250 - 499
12%
500 - 999
< 100
146
33%
29
42%
100 - 249
161
36%
25
36%
250 - 499
55
12%
8
12%
500 - 999
46
10%
4
6%
>= 1000
36
8%
2
3%
N.a.
2
0%
1
1%
96
22%
17
25%
101
23%
15
22%
Italian - Italy
130
29%
19
28%
22%
118
27%
18
26%
25%
58 Milano
Shopping
>= 1000
N.a.
36%
68%
67%
Via Torino
The opening of FNAC in 2000 kick-started a second life
for via Torino, bringing international high street retailers
into what was more of an independent retail street and
effectively turning its northern part into an extension of
Piazza Duomo. Zara opened its second Italian store in
2004, and was followed by the opening of the second
Muji store as well as the more recent Bershka and
Pull & Bear ones. The latest Oysho opening confirms
the appeal of the street to the large Spanish fashion
group, as well as the eclectic retail offer of the street.
There is a clustering of urban young fashion retailers,
including the forthcoming Stradivarius, and there are
rumours that another two international retailers in the
same segment considering to enter the Italian market
are looking for space in via Torino. However, Geox,
60 Milano
Shopping
Vergelio and Marilena among others also have stores
on the street, and there are rumours that a Zara Home
will open soon, all catering for a more grown up market.
Towards Largo Carrobbio the offer is less structured,
with a small cluster of telephone and accessories
shops.
With the only development site in the whole of the
study area, via Torino seems to be earmarked for
further changes in the near future. Expected to be
completed in two to three years, the development
could deliver another 3.000 m² of retail space with high
end specification which may appeal to retailers looking
for large units (which have been shown to be relatively
scarce throughout the nine streets analysed).
units
length(*)
length
(*)
Total
809
Via Torino, Distribution by retailer type
117
17%
Clothing
294
36%
35
30%
Accessories
120
15%
25
21%
36
5%
3
3%
Jewellery
35
4%
5
4%
Eyewear
14
2%
3
3%
39
5%
8
7%
56
7%
6
5%
Local facilities
45
6%
3
3%
46
6%
11
9%
Leisure Services
7
1%
2
2%
Department & Variety Stores
39
5%
2
2%
10
1%
1
1%
23
3%
5
4%
Other
5
1%
2
2%
Vacant
39
5%
6
5%
< 100
353
44%
76
65%
100 - 249
187
23%
21
18%
250 - 499
90
11%
8
7%
500 - 999
105
13%
8
7%
>= 1000
73
9%
4
3%
200
25%
18
15%
190
23%
21
18%
Italian - Italy
282
35%
55
47%
25%
137
17%
23
20%
15%
62 Milano
Shopping
25%
35%
23%
Italian - Italy
as of 09/04/2012
9%
< 100
13%
44%
11%
100 - 249
250 - 499
500 - 999
>= 1000
23%
64%
49%
Corso Vercelli
Among the nine high streets analysed Corso Vercelli
is the one with the most local shopping catchment.
While this is arguably a common feature with the outer
end of Corso Buenos Aires. Corso Vercelli’s retailer
standing, however, reflects a wealthier catchment, with
an old standing Cartier store and the historical Gemelli
mini-chain of luxury clothing and accessories for
man, woman and children. Indeed 15% of the streets
estimated frontage length is occupied by upmarket or
luxury single or multi-brand retailers, in line with via
Dante and almost twice as much as the entire Corso
Buenos Aires (8.2%).
Corso Vercelli can be somehow associated to the
wealthy villagey feel of, for instance, Marylebone High
Street, the Notting Hill area and Hampstead High
Street in London. These streets and Corso Vercelli
64 Milano
Shopping
share some of the less mainstream high street brands,
like Zadig & Voltaire, Comptoire des Cotonniers, and
some of the concepts: Matches and Browns fashion
in London and Gemelli and Brian and Barry in Milan.
It is also, among those considered, the high street
with the one of the lowest chain and international
retailer penetration (second only to the Galleria Vittorio
Emanuele II). With a high presence of amenities and
non-retail services (including the Gloria cinema) it
offers the wide range of facilities that are suitable
to a mostly residential area. Its offer is increasingly
complemented by via Belfiore, via Cuneo and via
Marghera, which extend the shopping parade further to
the west of the city. Also, the forthcoming CityLife retail
precinct could further strengthen the attractiveness of
the western and north western part of Milan.
units
length(*)
length
(*)
Total
685
Corso Vercelli, Distribution by retailer
101
Clothing
206
30%
33
33%
Accessories
46
7%
8
8%
16%
28%
Jewellery
40
6%
11
11%
Eyewear
5
1%
1
1%
51
7%
6
6%
10
2%
4
4%
Local facilities
98
14%
6
6%
38
6%
7
7%
Health & Beauty
2
0%
1
1%
29
4%
4
4%
Leisure Services
3
0%
1
1%
49
7%
1
1%
8
1%
2
2%
45
7%
7
7%
Vacant
55
8%
9
9%
< 100
238
35%
59
58%
100 - 249
138
20%
20
20%
250 - 499
129
19%
13
13%
500 - 999
91
13%
5
5%
>= 1000
90
13%
4
4%
108
16%
17
17%
131
19%
20
20%
Italian - Italy
254
37%
41
41%
16%
193
28%
23
23%
17%
19%
Amenities/ Nonretail services/
Vacant
37%
as of 09/04/2012
13%
35%
13%
66 Milano
Shopping
< 100
100 - 249
250 - 499
500 - 999
Italian - Italy
>= 1000
19%
20%
58%
54%
Corso Buenos Aires
Corso Buenos Aires is one of the longest high streets
in Europe. With 281 retail units from Piazza Oberdan
to Piazzale Loreto it is just below London Oxford
Street’s 298 units. Among the nine Milan high streets
considered it is also the one with the highest number of
brands (217) and of brands with more than one shop
(two H&M and two Foot Locker stores). The street has
a strong high street vocation, with only Marilena and
Vergelio representing multi-brand luxury accessories
and luxury homewear Frette. There are however a
number of upmarket brands, including multibrand
Class, Guess, Liu Jo, Luisa Spagnoli and Furla among
others.
It is also the high street with the highest number of
units above 500 m² in size, although the proportion of
68 Milano
Shopping
the total estimated frontage length is much higher in
Corso Vittorio Emanuele II (55%) and Corso Venezia
(40%).
Corso Buenos Aires is one of the most dynamic streets
in Milan, with an initial part, towards Porta Venezia,
with a reasonable touristic footfall thanks to both a City
Sightseeing stop and a concentration of hotels in the
part of the street between Porta Venezia and Piazza
Lima. The outer end of the Corso has a relatively
more local dimension. In general the broad range of
potential customers from different age groups as well
as ethnic background makes it a suitable area for new
brands looking to appeal to a broad spectrum of Milan
shoppers. This is for instance the case of Anthony
Morato, Playlife and Havaianas.
units
length(*)
length
(*)
Total
1999
281
Clothing
687
34%
90
32%
Accessories
215
11%
41
15%
95
5%
8
3%
Jewellery
73
4%
20
7%
Eyewear
31
2%
7
2%
94
5%
13
5%
55
3%
8
3%
Local facilities
314
16%
19
7%
95
5%
23
8%
Health & Beauty
6
0%
2
1%
69
3%
7
2%
Leisure Services
20
1%
6
2%
31
2%
2
1%
51
3%
7
2%
68
3%
11
4%
Other
10
1%
5
2%
Next opening
3
0%
1
0%
Vacant
83
4%
11
4%
Corso Buenos Aires, Distribution by retailer
Italian - Italy
24%
28%
Amenities/ Nonretail services/
Vacant
as of 09/04/2012
17%
0%
24%
< 100
100 - 249
250 - 499
14%
22%
26%
500 - 999
< 100
481
24%
142
51%
100 - 249
580
29%
74
26%
250 - 499
325
16%
32
11%
500 - 999
278
14%
17
6%
>= 1000
330
17%
14
5%
4
0%
2
1%
432
22%
44
16%
491
25%
56
20%
Italian - Italy
564
28%
122
43%
22%
Amen./Non-retail services/Vacant
512
26%
59
21%
16%
N.a.
70 Milano
Shopping
>= 1000
16%
29%
N.a.
64%
57%
Methodology
The research relies on a variety of data sources for
macroeconomic and regional and local context. The
bulk of the analysis is however based on primary data
collected by Jones Lang LaSalle and Sincron Inova between April 2011 April 2012. In particular:
• Footfall data was collected in two separate dates,
16/04/2011 and 22/11/2011 with the aim to minimise
any on-peak bias14
• Data on high street units, including shop names,
estimated frontage length and shop category was collected between 13th December 2011 and 9th April 2012.
The footfall count was carried
out by Jones Lang LaSalle.
Footfall is counted at the most
heavily frequented point of the
location. The survey for this report
was carried out at several points
on peak hours average Saturday.
Pedestrians were counted during
the above period at 5-minute
intervals. Only pedestrians
passing left to right were counted
for the first five minutes, and
those passing right to left for
the following five minutes. A
5-minute break was made after
each 10-minute block to offset
fluctuations caused by traffic lights
or public transports.
14
Retailers have been classified by:
• Typology of items sold, with separate entries for
next openings and vacancies and a residual category
for unusual entries such as the Urban Centre, art galleries and Dianetics;
• Unit size range, with brackets including < 100 m²,
100 – 249 m², 250 – 499 m², 500 – 999 m² and >=
1000 m²;
• Standing of the retailer, divided into High street, Upmarket, Luxury and Luxury multi-brand. The classification was based on the JLL “Glitter & glamour shining
brightly report” on luxury retailing in Europe, as well
as on a case by case assessment of each retailer. A
further Amenities/ Non-retail services/ Vacant category
was created to group all local amenities (e.g. banks,
bars) as well as non-retail services (such as Dianetics)
and vacant units;
• Whether the retail unit is part of a chain or is an
independent one, based on a case by case analysis of
brands and assuming that a chain includes a minimum
of three retail units across the world;
• The brand’s nationality, so for instance Bulgari is
recorded as an Italian brand despite it being part of the
French LVHM group since March 2011;
• The geographies in which the brand can be found,
i.e. whether it can be found in Italy only or also abroad,
in stand-alone shops, flagship stores or shop in store
ones (e.g. a shop in shop at Harrod’s).
The prime rent is the EUR price per sqm and year of
a sustainable rent that can be achieved for a newly
let notional ideal space in an absolute prime location.
Such an assumed unit is characterized by a sales area
of 100 to 200 m2, stair-free ground-floor access.
Milano
Shopping 73
The shop frontage length is calculated in linear meter
and includes not only the windows on the main street
analysed but also those on the side walls. It is estimated by measuring the number of feet of each frontage,
a foot equalling 0.65 metres.
In the tables summarising the key facts for each high
street the following applies:
• (*) 100% includes vacancies
• (**) foreign indicates a retailer with headquarters
outside Italian boundaries; International vs Italy indicates a retailer operating on the international or Italian
market only.
• (***) percentage of chains out of grand total, including vacant units and local amenities
The data in the maps was last updated as per the
schedule below. Notable openings have been then
included when identified until 09/04/2012. Any later
opening has been recorded in the main text of the report but is not reflected in the maps.
74 Milano
Shopping
Street
Latest thorough update
* Via Montenapoleone
13/12/2011
* Via Manzoni
13/12/2011
* Corso Vittorio Emanuele
26/10/2011
* Galleria Vittorio Emanuele
13/12/2011
* Corso Venezia
26/10/2011
* Via Dante
13/12/2011
* Via Torino
12/12/2011
* Corso Buenos Aires 06/02/2012
* Corso Vercelli
13/12/2011
While all information is provided to the best of our
knowledge, we assume no liability for the correctness
of the information.
Francesca Cattagni
Retail Agency
Milan
+ 39 02 85 868 638
[email protected]
Elena Di Biase
Research
Milan
+ 39 02 85 868 666
[email protected]
Pictures by Marialuisa Pastò and layout by Carolina Mauri
Milano
Shopping - June 2012
www.joneslanglasalle.com
www.joneslanglasalle.it
www.sincron-inova.it
COPYRIGHT © JONES LANG LASALLE IP, INC. 2012. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior
written consent of Jones Lang LaSalle. It is based on material that we believe to be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty
that it contains no factual errors. We would like to be told of any such errors in order to correct them.
Printing information: paper, inks, printing process, recycle directive.

Milano Shopping - Jones Lang Lasalle

Transcription

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